Combining two financial companies across the Tasman was never going to be easy. Trans-Tasman insurer Tower has just announced plans to split its Australian and NZ groups, admitting there aren’t any synergies.

The group intends to split into separately listed companies with new boards and managements before the end of the year.

Tower Group MD Jim Minto says this proposal will allow the boards and management to focus on their operations and over time will lead to better performance for each entity. 

“The outcome will be a further strengthening and focusing of Tower through two separately listed businesses which will benefit not only shareholders but also our clients and business partners.”

Mr Minto says the businesses are very different in their characteristics and operations. “They don’t depend on one another operationally or gain natural synergies from working together.”

The company is seeking shareholder approval to demerge the Australian business and list it on the Australian Stock Exchange.

Tower says it will also undertake a capital raising of $150-180 million through a renouncable rights issue.

Mr Minto will become CEO of Tower Australia Group, and current Group CFO John de Zwart will take the CFO role at the listed Australian company.

The appointment of a CEO for the overall NZ business is being finalised, and existing business line CEO positions will not be affected.

The Chairman of Tower NZ will be Tower director Tony Gibbs and the Chairman of Tower Australia Group will be present Tower Chairman Keith Barton.