On 24 November 2008, Australian Wealth Management Limited and IOOF Limited announced their intention to merge.
IOOF Holdings and Australian Wealth Management will merge to create:
- A leading financial services company
- Over $88 billion under management, administration, advice and supervision
- Operations spaning the entire wealth management value chain
The merger has been unanimously recommended by the Boards of IOOF and AWM.
About IOOF Holdings
IOOF is very similar to AWM, in that it offers a range of investment and superannuation products for investors and employers.
They operate a number of businesses including:
- IOOF Portfolio Solutions – Superannuation administration
- IOOF Investor Solutions – Investment products
- Perennial – Asset management
- Consultum – Dealer group
Together, we will use our combined resources more efficiently to provide wealth management products and services to more Australians.
Visit the IOOF website, http://www.ioof.com.au/
Merger terms
Under the terms of the proposed merger, each AWM shareholder will receive 1 IOOF share for every 3.73 AWM shares owned.
AWM shareholders will be required to vote on the transaction. The transaction requires approval of 75% of shares and 50% of shareholders present and voting at a meeting of AWM shareholders to be held in March 2009. The expected implementation date is scheduled for late March 2009.
Merger timetable
(Please note that these dates are indicative only and are subject to change)
| Completion of documentation and due diligence |
12 December 2008 |
| Preparation of Scheme booklet |
Mid January |
| First court hearing |
6 February 2009 |
| Print and despatch Scheme booklet to AWM shareholders |
10 February 2009 |
| Scheme meeting held |
10 March 2009 |
| Second court hearing |
11 March 2009 |
| Implementation date |
25 March 2009
|
| New IOOF shares commence trading |
30 March 2009 |
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Important documents & ASX announcements
24 November 2008
Australian Wealth Management Limited and IOOF Limited announce their intention to merge
Read the ASX announcement
View the analyst presentation
Frequently Asked Questions
Why have Australian Wealth Management (AWM) and IOOF Holdings decided to merge?
The two companies have decided to merge to establish a significantly stronger business. The rationale for combining these two organisations is compelling. It will deliver substantial enhanced earnings per share accretion for both AWM and IOOF shareholders. Moving forward, we expect the experience of AWM and IOOF customers will also be enhanced.
The merger will create a leading financial services company with more than $88 billion funds under management and administration, spanning the entire wealth management value chain, with an enhanced distribution network of over 580 aligned financial advisers nationwide.
There is significant value in bringing the two companies together as they are similar in so many ways, with the merger expected to generate post tax cost synergies of $20 million per annum in the first 12 months.
Why merge at this time?
The merger represents a unique opportunity to combine two highly complementary businesses. In a difficult operating environment for wealth managers, we expect that the transaction will realise immediate value for both sets of shareholders and put the merged group in a very strong market position
The recent downturn has illustrated the importance of size and scale in terms of competitive position. The new company, through the synergies, will be much stronger and better placed to compete in the current marketplace. The size of the synergies relative to the expected market capitalisation of the combined company also becomes greater.
Going forward, it is expected that the combined entity will be well positioned to take advantage of any improvement in the markets.
How will the merger be funded?
The merger will be achieved by IOOF Holdings Ltd acquiring AWM Limited via a Scheme of Arrangement. The consideration will be one IFL share for every 3.73 AWM shares. The transaction will take more than four months to complete, subject to a vote by AWM shareholders.
As this is a scrip only transaction, no significant cash funding is required.
Has the merger received the approval of IOOF shareholders?
IOOF shareholders are not required to vote on the merger, however we expect IOOF shareholders to be highly supportive of this deal. They will now be shareholders in a more profitable and robust company, with significantly improved long term prospects.
Who will be the Managing Director of the new company?
Australian Wealth Management’s Managing Director Christopher Kelaher will be the Managing Director of the merged group.
It makes sense for Chris to be the Managing Director as from a business continuity perspective, the majority of businesses are contributed from AWM and he knows these intimately.
IOOF’s current CEO and Managing Director will continue to lead the IOOF group through to merger completion.
How will things change for stakeholders?
The merged company will be significantly stronger with better scale in its operations, wider sales and distribution reach, a broader product range, lower overheads, improved service to advisors and ultimately, a stronger balance sheet.
How will the merger affect AWM’s and IOOF’s businesses?
There will be no change to the product or service offerings, and the combined business will continue to develop the extensive range of products to be relevant to broader market segments.
Do I need to do anything?
If you are an AWM shareholder
In early February AWM shareholders will receive a scheme booklet outlining the details of the merger. They will be asked to vote on the merger at a scheme meeting on 10 March 2009.
You will receive 1 IOOF share for every 3.73 Australian Wealth Management shares you hold.
If you are an IOOF shareholder
There is no action required by IOOF shareholders.
Who can I speak to about the merger?
Please contact Melinda Hofman, Corporate Affairs Manager at Australian Wealth Management Limited on (02) 9028 1054 or email investorrelations@awmlimited.com.au