IOOF, an Australian financial services company, has agreed to acquire MLC Wealth, the wealth management business of National Australia Bank (NAB) for AUD1.44bn ($1.06bn).
The financial services firm said that the acquisition will enable it to create a leading advice-led wealth manager in Australia with nearly AUD510bn ($374.8bn) funds under management and administration (FUMA) and around 1,884 advisers.
The company further said that MLC Wealth is a highly complementary business to it and their combination presents it the scope to lead the transformation of the Australian wealth management industry.
The Sydney-based MLC Wealth is said to cater to about 1.1 million members through its nearly 540 financial advisers.
IOOF following the acquisition will be in a position to serve nearly 2.2 million Australians with its financial advice and wealth management services.
The business to be acquired under the deal includes the Godfrey Pembroke and MLC brands which are engaged in providing financial advice, platforms, retirement and investment solutions, and asset management services to corporate, institutional and retail customers.
IOOF CEO comments on the acquisition of MLC Wealth
IOOF CEO Renato Mota said: “The opportunity to acquire a highly complementary business of the quality and size of MLC is compelling. MLC is a natural fit with IOOF and presents a unique opportunity to create value from synergies for the benefit of clients, members and shareholders.
“This is a once in a generation opportunity to create the leading wealth manager of the future.
“As the financial service industry reshapes, a much bigger and better IOOF will position it at the forefront of the industry transformation.”
NAB said that it will retain legal ownership of MLC Wealth’s advice entities in order to complete advice-related remediation programmes. The bank said that it will continue to provide targeted wealth management products and services via its other subsidiaries JBWere and nabtrade.
NAB and IOOF agreed to form a partnership for offering a variety of products and services. Under this, a referral agreement will be signed to enable NAB’s customers to ger access to financial advice.
The bank said that the sale is in line with the strategic decision it took about two years ago to pursue an exit of the wealth management business. Besides, the transaction aligns with its strategy of simplifying and focussing on its core banking business, while enabling a stronger future for MLC Wealth.
NAB Group CEO Ross McEwan said: “The sale of MLC will enable NAB to prioritise investment and focus on executing our refreshed strategy of delivering simpler, more streamlined products and processes for our customers and colleagues.
“NAB has taken a disciplined approach over the past two years to transform the business and prepare it for exit. Significant work has been done by MLC CEO Geoff Lloyd and his executive team to modernise and strengthen the MLC business and remediate customers.”
The deal, which is subject to regulatory approvals from APRA and ACCC, and the meeting of other conditions, is likely to close by mid-2021.
