Australian banking and insurance group Suncorp-Metway has made an offer of A$7.9 billion for fellow Australian general insurance company Promina.
The move, which is the latest in a general trend of consolidation in the Australian insurance sector, will change the emphasis of Suncorp’s business away from banking and towards insurance.
Promina, which employs over 7,000 people in Australia and New Zealand, has indicated that it is favorably disposed to the offer. Suncorp is offering 0.2618 of its own shares and A$1.80 cash for each Promina share. The Financial Times suggests that this is equivalent to A$7.64 per share.
In a statement, Suncorp said that it believes bringing together Suncorp and Promina is a logical combination of two complementary businesses and will provide significant benefits for both Suncorp and Promina shareholders, as well as their employees and customers.
Shares in Promina have risen over 15% since speculation that a takeover offer was imminent began days before the deal was confirmed.