According to the Australian’s “dataroom” column Macquarie even considered an acquisition of AMP “more than a year ago” and evidently dodged a bullet in not following through with that deal given the revelations that came out of the Royal Commission.
Subsequent to the Royal Commission AMP has announced controversial plans to sell its troubled life and general insurance business to Resolution Life for $3.3 billion.
It also plans to divest via an initial public offering its New Zealand wealth management and financial advice business.
That would leave Macquarie looking to acquire AMP’s banking and home loan lending business, its Australian wealth management business and its asset management arm AMP Capital that manages assets for clients in Japan, China and internationally. Much of AMP Capital’s cash is invested in infrastructure assets which is an area Macquarie has particular expertise in.
Macquarie also has a small home loan lending and retail banking financial services group primarily focused on higher income households in its home market of Australia, with AMP’s similarly vanilla banking group also one of its best performers.
Although AMP Capital and AMP Bank operate in similar areas to some of Macquarie’s units, it would be a gutsy move by its incoming CEO Shemera Wikramanayake to acquire the tarnished AMP Group if it included the wealth management unit.
One option could be to divest the wealth management business if acquired, while rebranding the AMP Capital and AMP Bank units under the Macquarie brand.
The deal looks an extremely long shot, although AMP’s share price has rocketed another 8% to $2.67 this morning as it fights off criticism from fund managers that its decision to sell its life insurance arm was “stupid” and “value destroying”.
Macquarie Group will hand in its interim profit report to investors tomorrow morning.
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Motley Fool contributor Yulia Mosaleva owns shares of Macquarie Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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.