NZ Super, ACC agree terms to buy 45% of Kiwibank, subject to Reserve Bank clearance

The New Zealand Superannuation Fund and Accident Compensation Corp have agreed on commercial terms to acquire 45 percent of Kiwi Group Holdings from NZ Post Group for a price provisionally put at $495 million and have applied to the Reserve Bank for clearance of the deal.

NZ Post chief executive Brian Roche said details of the agreement will be released to the market by the time the Reserve Bank has made its decision.

The deal would allow the state-owned enterprise to repay debt, pay a special dividend to the government, and increase its focus on the parcels side of the business, while Kiwibank would end up with better-resourced owners. NZ Post faces an on-going decline in its core mail business and can no longer provide further capital to the bank, having pumped in about $400 million of capital since Kiwibank was set up 14 years ago, funded by debt.

The sale was proposed, conditional on Kiwibank remaining 100 percent in public ownership, "as a means to provide Kiwibank with access to additional sources of capital and investment expertise to support the next stages of its growth, and for NZ Super Fund and ACC to gain a significant minority stake in a large and well‐performing unlisted New Zealand business," the statement from Roche said. It follows completion of due diligence by the two government-owned fund managers.

Kiwi Group owns Kiwibank and its associated businesses such as Kiwi Wealth Management and Kiwi Insurance. Under the transaction, NZ Super would acquire 25 percent and ACC would pick up 20 percent. The indicative offer values Kiwi Group at $1.1 billion, although the final price is still to be determined.

(BusinessDesk)

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Jonathan Underhill
Thu, 15 Sep 2016

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NZ Super, ACC agree terms to buy 45% of Kiwibank, subject to Reserve Bank clearance