AMP hires M&A consultants for strategic portfolio review

15 September 2020 2 min. read

Australian financial services group AMP has engaged M&A consultants to undertake a strategic review of its portfolio.

AMP has been struggling with declining profitability and a corresponding dip in share price for a year now. Given that the financial services group has one of the largest shareholder registers in Australia, this has led to significant pressure on the company’s leadership.

Change is now afoot at the company. A new chairperson in the form of Debra Hazelton – a three-decade financial services veteran – was appointed at the end of last year. Just weeks later, Credit Suisse, Goldman Sachs and King & Wood Mallesons have now been brought on board to conduct a comprehensive portfolio review of the firm’s assets.AMP hires M&A consultants for strategic portfolio reviewAccording to Hazelton, the goal is to create shareholder value – something that the company has struggled with for a year now – and all possible options are being explored. “We have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner,” Hazelton said.

Credit Suisse and Goldman Sachs will leverage their wealth of financial expertise in the merger & acquisition space to inform the review, while King & Wood Mallesons will take care of the legal side of things.

AMP completed the sale of its life insurance practice in June this year, raising some capital to tide things over. Of the remaining practices, AMP Capital – the firm’s investment management service – is its flagship vertical. 

While getting buyers interested in individual practices would be relatively more straightforward, AMP’s businesses are interconnected and isolating any one would be a tremendous challenge. The consortium of dealmakers will be tasked with identifying how the assets match up with and relate to each other.

Finding a buyer for the entire practice will also pose a challenge, given the firm’s decline in financial performance. In the same boat as many other financial services institutions, AMP was hit hard by the Royal Commission investigations of 2017, which found fraudulent transactions in AMP’s books. Add to this the fact that AMP remains on the back foot from a digital transformation perspective, and the uphill nature of the task becomes apparent.