ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business

The market is a sea of red on Monday…

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Young man looking afraid representing ASX shares investor scared of market crash

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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a sizeable decline. The benchmark index is currently down 1.9% to 7,225.9 points.

Here’s what is happening on the market today:

Bank of Queensland’s ME Bank acquisition approved

The Bank of Queensland Limited (ASX: BOQ) share price is trading lower today despite announcing that it has received Treasurer approval to acquire ME Bank for a cash consideration of $1.325 billion. Positively, the approval of the acquisition by the Treasurer was the only condition precedent to completion of the transaction. As a result, completion is now expected to take place on 1 July 2021.

CBA to sell its insurance business

The Commonwealth Bank of Australia (ASX: CBA) share price is also tumbling lower today despite the release of a positive announcement. According to the release, the company has signed an agreement to sell its general insurance business to underwriter Hollard Group. Commonwealth Bank expects this to lead to a post-tax gain of $90 million from the sale. This includes estimated post-tax separation and transaction costs of approximately $130 million.

Boral to sell US business

The Boral Limited (ASX: BLD) share price is pushing higher today after it announced an agreement to sell its North American Building Products business to Westlake Chemical Corporation. According to the release, the two parties have agreed a fee of US$2.15 billion (~A$2.9 billion). This is expected to lead to a significant surplus in capital, which could be returned to shareholders via a distribution.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Megaport Ltd (ASX: MP1) share price with a 2.5% gain on no news. The worst performer has been the Codan Limited (ASX: CDA) share price with a disappointing 12.5% decline. Investors may believe that recent weakness in the gold price will hurt demand for its metal detectors.

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James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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