Australia's largest bank, Commonwealth Bank of Australia (CBA), yesterday announced the sale of its 37.5% equity interest in BoComm Life Insurance to Japan's Mitsui Sumitomo Insurance (MSI) for CNY3.2 billion ($668 million).
The transaction is expected to result in an indicative after tax gain on sale of approximately A$450 million ($341 million). The carrying value of CBA’s equity interest in BoComm Life was A$150 million as at 31 December 2017.
CBA CEO Matt Comyn said, “This transaction represents a further step in simplifying and focusing our portfolio and follows the announcement of the proposed sale of the Group’s life insurance businesses in Australia and New Zealand to AIA Group, and the strategic review of the Group’s life insurance business in Indonesia.”
Prior to completion of the transaction, BoComm Life intends to undertake a capital increase, for which CBA’s pro rata contribution will be CNY1.125 billion. This amount will be separately reimbursed in full by MSI on completion of the transaction.
Completion of the sale of the BoComm Life equity interest is subject to the China Banking and Insurance Regulatory Commission’s regulatory approval process, Chinese merger clearance and completion of the BoComm Life capital increase.