Recently floated broker network Austbrokers has begun a six-month exclusive negotiation period with rival cluster IBNA to pursue complete acquisition.

Austbrokers Company Secretary Steve Rouvray told Sunrise Exchange News yesterday his organisation is looking to unite with IBNA, but hopes it will be able to carry on operating as it has always done.

Austbrokers CEO Lach McKeough has advanced the group rapidly since floating the company in November after ING sold 90% of its share.

In a statement released to the Australian Stock Exchange yesterday afternoon, Austbrokers says its heads of agreement with IBNA involves a proposal for Austbrokers to “provide the same services to IBNA members that IBNA now provides”.

“As part of that proposal, it is proposed that Austbrokers would acquire certain assets from IBNA required to undertake those services.”

The main points of the proposal include Austbrokers/IBNA creating a combined marketing force of 111 brokers Australia-wide (Austbrokers has equity in 33 and IBNA members in 78) with gross premiums of about $1.5 billion.

The statement also says the proposal will establish a succession planning solution for IBNA members, as well as better access to existing or future Austbrokers underwriting facilities.

There will be rationalisation of any areas of duplication – particularly back-end services such as IT, member services, compliance and other combined initiatives.

Austbrokers says in its statement that it wants to deliver value to IBNA licence-holders who transfer to Austbrokers as part of this proposal. IBNA will be acquired by Austbrokers and will evolve to provide services for Austbrokers/IBNA members.

In the past year two major capital city-based IBNA brokerages have quit to join Austbrokers.

Mr Rouvray says the arrangement “has legs” because the IBNA board has agreed to negotiate.

What are the implications for rival major cluster Steadfast? Mr Rouvray doesn’t expect the situation to change.

“The individual brokers compete, but not the cluster group,” he said. “I don’t think the acquisition will change the way Steadfast operates at all.”