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Insurance Australia Group Limited (ASX:IAG) is poised to take control of Wesfarmers Limited's (ASX:WES) insurance underwriting business by the end of the current financial year (June 30, 2014).
The insurance company says it has now received the final regulatory approvals for the acquisition which was announced to the market at the end of last year.
The $1.85 billion purchase includes Wesfarmers’ underwriting businesses trading under the WFI and Lumley Insurance brands and a ten-year distribution deal with Coles.
IAG Managing Director and CEO Mike Wilkins says the acquisition is a compelling strategic fit for the company. Mr Wilkins hopes the purchase will enable IAG to create a market-leading commercial lines position in Australia, sustain its position in New Zealand and deliver long-term shareholder value.
IAG improved its net profit to $676 million in the first half of the 2014 financial year.
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