Challenger Financial Services Group (CFSG) and National Australia Bank (NAB) have signed an agreement. As per the deal, NAB has agreed to acquire the Mortgage Distribution and Multi Brand Lending businesses of CFSG, along with $4 billion of residential mortgages held in warehouses for a consideration of $385 million.
At the same time, the residual income streams from all term funded mortgages have been sold to Challenger Life Company Limited (CLC) for a consideration of $575 million.
Going forward, Challenger intends to focus purely on the significant opportunities that exist within the investment management activities of its Life and Funds Management businesses. Challenger is confident about the significant opportunities that exist in these areas.
Dominic Stevens, CEO of Challenger, said: Challenger is looking forward to taking advantage of significant strategic opportunities that exist in the retirement income and investment management markets. Whilst we are very proud of our history and performance within the mortgage industry, the changing dynamics of that market has meant that the significant capital tied up in the business will be better refocused into growth opportunities within the organisation’s other divisions.
The transaction is subject to regulatory approvals and is likely to close by 31 October 2009.
