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Will National Australia Bank Ltd. sell its funds management business to Nippon Life?

Shares in National Australia Bank Ltd. (ASX: NAB) are falling lower today, down 0.44% to $29.43, amidst speculation that NAB may divest parts of its business. According to the Australian Financial Review, NAB engaged in preliminary discussions to sell a stake in its funds management operations to Nippon Life.

NAB is conducting a strategic review of its wealth business – which has $134 billion of funds under administration as at September 30 – and is considering several options, including an IPO of the division or the divestment of parts or all of it. Broking and advice arm JBWere might be subject to a management buyout according to the paper.

Other big banks have contemplated similar moves. In October, Australia and New Zealand Banking Group (ASX: ANZ) and IOOF Holdings Limited (ASX: IFL) struck a $1 billion deal over the sale of ANZ’s OnePath pensions and investments business, and Commonwealth Bank of Australia (ASX: CBA) is considering selling its global asset management operations.

If NAB ends up divesting, Nippon Life will be a likely buyer. The Japanese insurer knows NAB well, since it bought 80% of its life insurance operations in 2016 for $2.4 billion, and lately has been pursuing an aggressive acquisition strategy.

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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