NAB Agrees A$825 M Deal for Aviva Australia

Darlington Musarurwa
22 Jun, 2009
New York City

In Sydney, Australia trading iron ore and copper miners gained after the Xstrata offered a

[R]3:00AM New York, 6:00PM Sydney – In Sydney trading iron ore and copper miners gained after the Xstrata offered a ‘merger of equals’ to Anglo American. BHP Billiton and Fortescue Metals closed higher. NAB jumped after it agreed to acquire Aviva Australia for A$825 million.[/R]

Australian stocks increased marginally on deals and acquisitions. Xstrata is expected to make a £41 billion takeover proposal of Anglo American.

National Australian Bank announced that is has agreed to purchase Aviva Plc wealth advisory and life insurance business for A$825 million in cash.

Energy stocks also increased despite crude oil prices tumbling 2.6% to $69.60 per barrel on speculation prices will rebound and continue to move higher.

In Sydney trading ASX 200 Index rose 0.5% or 18.60 to 3,918.20.

Of the ASX 200 index stocks 106 advanced, 84 declined, and 11 were unchanged. Macquarie Countrywide led gainers in the index shares with a rise of 10.4% followed by Macquarie Office soaring 9.5%.

Anglo Board Opposed to Xstrata Merger

London based TimesOnline reported today that the Anglo-American board is opposed to the proposed £41 billion takeover by Swiss miner Xstrata.

Xstrata intends to merge is coal operations in Queenslands with Anglo American and also broaden its portfolio of assets that includes metals that rising economies of China and India may need.

The report however notes that the proposal is """"at a very preliminary stage and that there is no certainty that any transaction will be forthcoming.""""

According to the report, there is a limited scope for cost savings in platinum and diamond operations and where there is very little overlap between the two companies.

However, Xstrata says the merger will create """"a premier portfolio of operations diversified across commodities and geographies, with enhanced scale and financial flexibility to fund future growth.""""

WorleyParson Wins $150 million Contract

Engineering company WorleyParsons said in a statement today it has won six contracts worth US$150 million to manage integrated gas projects in Abu Dhabi.

The company will act on behalf of Abu Dhabi Gas Industries, Abu Dhabi Marine Operating Co and Abu Dhabi Gas Liquefaction Co to manage six contractors that will be selected and will also cover the commissioning and handover of the facilities to operations.

NAB Buys Aviva’s Australian Wealth Advisory Business

National Australia Bank has agreed to acquire Aviva Plc Australian life insurance and wealth advisory business for estimated A$825 million in cash.

The deal is expected to be sealed by the fourth quarter of 2009 after approval from the regulatory authorities.

Through the transaction, NAB will get Aviva Australia’s Norwich Union Life and Navigator businesses, including shares in four independent financial advisory firms.

Aviva Australia’s life insurance business has A$256 million of premiums and oversaw A$3.7 billion in December, while its investment platform managed A$12 billion as of March. In addition, its distribution business includes equity in four groups representing about 268 advisors.

National Australia Bank’s Tier 1 ratio will decline by 15 basis points after the acquisition.

Gainers & Losers

Energy stocks were mixed. Paladin Energy advanced 8.3% on speculation crude oil prices will continue to rise.

However other energy stocks dropped as crude oil prices shed 2.6% to $69.60 per barrel. Nexus Energy Limited fell 7%, Atlas Iron dipped 4.5% and Infigen Energy plunged 4.2%.

PanAust Limited closed up 6.9% to 38.50 cents but dropped earlier as low as 34 cents after it said that a mechanical failure may close its plant for more than 3 weeks but later reversed its position and said the disruption to its mine in Laos will be minimal.

ASX 200 Index Movers

Boart Longyear Group led the decliners in the ASX 200 index of 10.4% followed by losses in Australand Property Group of 9.8%, in Hastings Diversified Utilities Fund of 7.3%, in Nexus Energy Limited of 6.9% and in Virgin Blue Holdings Limited of 5.9%.

Macquarie CountryWide Trust led gainers in the ASX 200 index with a rise of 10.4% followed by gains in Macquarie Office Trust of 9.5%, in Paladin Energy Ltd of 8.2% and Caltex Australia Limited of 7.5%.