Listed insurer Calliden Group (Calliden) has been given the green light by the Australian Prudential Regulations Authority (APRA) to purchase Australian Unity's (AU) general insurance business.
Calliden announced it would purchase AU's general insurance business including Mansions of Australia, for $62.5 million earlier this month.
As a condition of the sale, the acquisition would only be finalised pending an APRA approval which is a condition precedent of the Sale and Purchase agreement.
APRA, pursuant to its delegated authority by the Treasurer, yesterday approved the proposal under section 14 of the Financial Sector (Shareholdings) Act 1998 (FSSA).
Funding for the transaction will comprise a share placement of 30.1 million Calliden shares to AU, new bank debt of $25.0 million and internal funding of $23.6m. Following the transaction, AU will be a 13 per cent shareholder in Calliden.
Calliden chief executive Nick Kirk said the acquisition created an avenue of expansion for the group.
"Calliden has been building momentum and capability through organic growth and also through targeted acquisitions.
"The acquisition of AU's general insurance business represents a step change in scale for Calliden and is an exciting development for Calliden shareholders."
Longreach has acted as corporate adviser to Calliden on this transaction.
The completion date for the sale is 31st July 2007.
