The Suncorp Group Ltd (ASX: SUN) share price has continued its positive run on Thursday and hit a new 52-week high.
In morning trade, the insurance giant's shares are up over 1% to $16.53.
Why is the Suncorp share price at a new 52-week high?
Investors have been buying the company's shares again on Thursday thanks to the release of an announcement this morning.
According to the release, Suncorp has signed a share sale and purchase agreement with Resolution Life to sell its New Zealand life insurance business, Asteron Life.
Resolution Life will purchase Asteron Life for a total of NZ$410 million (A$375 million). This includes an upfront payment of NZ$250 million (A$223 million) at completion with the remainder due 18 months after completion. The company notes that interest will be earned on the outstanding balance.
The company's New Zealand general insurance business remains unchanged and part of the Suncorp Group.
What's next?
The transaction is subject to New Zealand regulatory approvals and notifications. This includes the Reserve Bank of New Zealand, the Overseas Investment Office, and Commerce Commission. But if everything goes to plan, it is expected to complete within nine months.
Importantly for customers of Asteron Life, the transaction will result in no change to its business operations. It is expected to continue to operate under the same brand with the same management team. It will also continue to support advisers and their customers using the same local New Zealand team and remain open to new business after the acquisition completes.
'Reshaping' Suncorp
Suncorp Group CEO Steve Johnston notes that this transaction is part of the company's plan to reshape its business. He said:
The transaction continues the reshaping of the Suncorp Group, and positions both the general and life insurance businesses for ongoing growth and success – benefiting employees, customers, and other stakeholders. We believe it is a win-win for our stakeholders.
We have simplified our portfolio in recent years under a strategy designed to align everyone at Suncorp around improving the way we deliver value for our Australian and New Zealand customers. We remain committed to the New Zealand general insurance market as part of our refocused group.
This latest gain means that the Suncorp share price is now up 36% over the last 12 months.
To put this into context, a $20,000 investment a year ago would now be worth $27,200. And that doesn't include the dividends that Suncorp has paid out over the period.
