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Suncorp (ASX: SUN) will offload its Australian wealth business Suncorp Portfolio Services Limited (SPSL) to LGIAsuper for $45 million as part of the company's plan to simplify its portfolio.
According to SUN CEO Steve Johnston the sale agreement is a good outcome for the company's 137,000 superannuation members.
"When I was appointed CEO, I said I wanted to align everyone at Suncorp around improving the way we deliver for our insurance and banking customers," Johnston said.
"This approach is already delivering results, and the wealth sale will allow the bank team to focus exclusively on the priorities we outlined at the interim result in February."
The sale of SPSL comes as LGIAsuper is progressing towards a merger with another Queensland-based fund, Energy Super.
Together with Suncorp's wealth business, the combined entity will have around $28 billion in funds under administration and approximately 250,000 members.
"After extensive engagement with a number of potential acquirers, we believe that LGIAsuper is best placed to deliver sustainable member outcomes," Suncorp CEO of banking and wealth Clive van Horen said.
"The value and purpose of LGIAsuper, which is also headquartered in Queensland, align closely with those of Suncorp.
"This transaction will also enable the combined business to take advantage of size and scale benefits."
Once the sale is completed, Suncorp will enter into an agreement with LGIAsuper to distribute superannuation products to Suncorp customers for 18 months.
The transaction is expected to be completed in FY22, subject to regulatory approvals.
Shares in SUN are up 0.62 per cent to $10.48 per share at 12.49pm AEST.
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