TAL Dai-ichi Life Australia has agreed to acquire Westpac’s Australian life insurance arm in a deal worth at least $900 million, the two businesses announced today.

The binding share agreement comprises of a cash consideration of $900 million plus adjusted net worth on completion as well as a 20-year exclusive strategic distribution alliance for the provision of life products to the bank’s customers.

Completion of the transaction is subject to various regulatory approvals and is expected to occur in the second-half of the 2022 calendar year.

“This acquisition will enhance TAL’s scale and investment capability for the benefit of all of our customers and partners,” Group CEO and MD Brett Clark said.

“It will provide us with a strong base for continued growth and reflects our ongoing commitment to offering Australians a range of life insurance options and services to meet their diverse needs.

“In addition, this transaction will provide exciting opportunities for our people and, on completion, we also look forward to welcoming the Westpac Life team to TAL.”

He says the life insurer, which is owned by Japan’s Dai-ichi Life Insurance Company, looks forward to building a relationship with Westpac.

The sale of the life arm is part of Westpac’s bid to shed non-core banking assets and focus on its core lending business.

In July the bank announced its New Zealand life arm will be sold for $NZ400 million ($381 million) to Fidelity Life Assurance Company, and in the same month, the $725 million sale of its general insurance arm to Allianz was completed.

Since May last year, the lender has been undertaking a strategic review of its non-banking operations.

“This transaction is another step in simplifying the bank while continuing to help customers with their life insurance needs by partnering with TAL,” Westpac Group Chief Executive Specialist Businesses & Group Strategy Jason Yetton said.

Under the deal with TAL, Westpac will retain responsibility for certain pre-completion matters and provide protection to TAL through a combination of provisions, warranties and indemnities.

The bank says it will book a total accounting loss of about $1.3 billion post-tax.