Colonial to gobble up Pru
Colonial Ltd is being tipped to announce a A$1.6 billion takeover for the Australian and New Zealand operations of Prudential Corporation later todayko
Monday, August 17th 1998, 12:00AM
Colonial Ltd is being tipped to announce a A$1.6 billion takeover for the Australian and New Zealand operations of Prudential Corporation later today.The Australian Financial Review says the deal will catapult the Melbourne-based group into the first division of financial services on both sides of the Tasman.
A joint announcement on the deal is expected to be made in Sydney this afternoon.
The AFR says the acquisition, which will be funded largely off the group's balance sheet, will boost its funds under management and balance-sheet assets to A$65 billion, leaving only the Big Four banks – Commonwealth Bank, National Australia Bank, Westpac and ANZ – and AMP Ltd as bigger players in the Australasian market.
Colonial is in an acquisitive mode as it recent bought Legal & General Australia for A$892.
During that takeover process it raised A$958.7 million from the market to provide seed capital for its embryonic life business in China.
Prudential is a minor player in the Australian market with A$9 billion under management, however in New Zealand it is one of the four biggest life offices. In New Zealand Prudential has been eyeing further expansion following the acquisition, more than a year ago of NZI.
Colonial's total funds under management just topped A$50 billion at its June 30 interim balance date, but since that time it has consummated the L&G deal, boosting the total to A$56 billion, AFR says.
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