(RTTNews) – Australian group Westpac (WBC.AX, WBK) announced on Monday that it has agreed to sell Westpac Life Insurance Services Limited to TAL Dai-ichi Life Australia Pty Limited, a unit of life insurer Dai-ichi Life Group .

The companies will also enter into an exclusive 20-year strategic alliance to provide life insurance products to Westpac customers in Australia.

The sale price is AU $ 900 million. In addition, the transaction includes ongoing payments to Westpac.

The transaction is expected to close in the second half of calendar year 2022, subject to various regulatory approvals.

With the sale, Westpac will stop manufacturing life insurance products and return significant capital to the bank. The total book loss on the sale is approximately A $ 1.3 billion after tax.

The deal will add approximately 12 basis points to the senior capital ratio of Westpac’s Tier 2 common shares.

The company expects an after-tax loss of approximately $ 0.3 billion, mainly reflecting transaction and separation costs, to be realized in its fiscal 2021 results, while the balance of the loss will be recognized upon completion of the sale.

Westpac said it would retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of terms, guarantees and indemnities.

The deal is part of its plan to streamline its business portfolio, including announcements about the sale of its Lenders Mortgage Insurance, Westpac Pacific, Auto Finance and New Zealand Life Insurance businesses, as well as the recently completed separation of its General Insurance and Vendor Finance activities.

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