The planned joint venture between ASX-listed companies AUB Group and PSC Insurance Group in the UK is not proceeding.
According to PSC Insurance, it has formally ended discussions regarding the memorandum of understanding for the proposed transaction, which would have seen the business acquire a 50% stake in the UK retail division of AUB-owned London brokerage Tysers.
Without explaining further, PSC Insurance said: “The group has a solid pipeline of acquisitions, and our balance sheet is in a strong position to continue to grow this with our selective and disciplined M&A (mergers and acquisitions) strategy.”
Meanwhile, in its own announcement, AUB said: “Following considerable discussions and progress with PSC in relation to the JV, AUB has decided not to proceed with the JV. Accordingly, AUB will continue to own 100% of the entire Tysers business, including Tysers UK Retail.”
In response to the deal falling through, AUB has outlined its next move.
“AUB was due to receive AU$100 million from PSC under the JV,” the insurance group said.
“Given the JV is not proceeding, AUB is undertaking an equity raising as a result of not receiving these proceeds and to increase financial flexibility and balance sheet strength to allow AUB to capitalise on its attractive and value accretive bolt-on acquisition pipeline, having spent / committed to spend an expected AU$149 million on bolt-on acquisitions in FY23.”
The Tysers parent went on to describe the broker’s retail unit in the UK as a highly attractive business with meaningful scale, deep client relationships, and strong organic and inorganic growth potential.
“Owning 100% will enhance AUB’s strategic alignment with the rest of Tysers and AUB, with increased cross-sell opportunities,” it said.
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