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Herbert Smith Freehills is pleased to have advised Commonwealth Bank of Australia (CBA) on its entry into further agreements with AIA Group Limited (AIA) in relation to the planned divestment of its Australian life insurance business (CommInsure Life).

Under the further agreements, the parties have agreed to a revised transaction path, including the proposed entry into a joint co-operation agreement supporting joint activity and management across the AIA Australia and CommInsure Life businesses, reinsurance arrangements, partnership milestone payments and a statutory asset transfer as an alternative approach to completing the divestment of CommInsure Life.  The revised transaction path is subject to conditions including a number of Australian regulatory and life insurance entity board approvals.

The expected proceeds for CBA are A$2,375 million (subject to completion adjustments).

The Herbert Smith Freehills team was led by partner Tony Damian. The team included senior associates Amelia Morgan, Nick Conway, William Chew and Li-Lian Yeo and solicitor Tim Coorey. Partner Michael Vrisakis, special counsel Philip Hopley and senior associate Tamanna Islam provided assistance from the firm’s financial services practice.

Tony Damian, who is also co-chair of the firm’s Global Banks Sector Group said: “This is an important and innovative deal. It involves leading financial institutions and a significant Australian business. We are pleased for our team to have been involved in it.”

The firm worked closely with CBA’s internal M&A Legal function, led by Mark Alexander, with Cecilia Cobb and Louise Baldwin also involved in the deal. “The CBA M&A Legal team again excelled at driving this important deal forward,” Mr Damian said. The firm and the CBA M&A Legal team had also worked together on the original A$3.8 billion deal to divest the Australian and New Zealand life insurance businesses of CBA, which included the now completed sale of the Sovereign business in New Zealand.

“M&A activity in the financial services sector is running at very high levels. We’ve seen a number of large deals in the market over the past couple of years. Many of the deals, including this one, have a cross-border element,” Mr Damian further noted.

Herbert Smith Freehills, with a team led by Tony Damian, also advised CBA on the A$4.2 billion sale of its global asset management arm, Colonial First State Global Asset Management, which completed earlier this month and is advising CBA on the sale of financial advice business Count Financial.