By NZPA
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Monday 26th August 2002 |
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Westpac said it expected the acquisition would be cash earnings per share positive by the end of 2004.
An additional payment of up to $A150 million contingent upon exceeding performance hurdles had been factored into the transaction.
Earlier this morning Westpac's New Zealand arm WestpacTrust issued a "don't sell" warning to holders of its New Zealand class shares, pending the announcement.
The deal makes Westpac Australia's fourth largest retail funds manager with more than $A30 billion of funds under management.
Westpac chief executive David Morgan said the acquisition would boost its distribution, client services and growth in its wealth management division.
"This acquisition is a significant strategic milestone in Westpac's wealth management strategy," Dr Morgan said.
"The larger product range, extensive external and in-house distribution relationships and proven client service model will deliver major benefits to customers and advisers throughout Australia and New Zealand."
Westpac will now control BT's Wrap platform, a leading wealth management service platform with $A6.5 billion under administration.
The platform provides investors and financial advisers with consolidated reporting and administrative services and has been identified as a fast growing area in wealth management.
Combined with the master trusts, Westpac said it now had the second largest master trust and wrap capability with $A11 billion funds under administration.
It said currently these rank number one for inflows, capturing one third of the market.
BT's fund management operation in New Zealand is included in the acquistion. Westpac said this would "significantly enhance Westpac's investment management capability in New Zealand while delivering substantial external distribution networks."
"Following the acquisition, Westpac moves to fifth position in funds under management in New Zealand."
The purchase will see the combined business restructured into an asset accumulation business, an investment management business, a life insurance business, and the New Zealand business.
Mike Pratt, currently group executive of the bank's New Zealand and Pacific operations, has been appointed group executive of Westpac's business and consumer banking and continue overseeing the New Zealand business.
Craig Stobo, currently head of BT Financial Group New Zealand, will head the New Zealand wealth management business.
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