Acting Assistant Treasurer Mathias Cormann has approved Insurance Australia Group's (IAG) planned acquisition of Wesfarmers' (WES) Lumley Insurance business in New Zealand.
The approval comes after a similar green light from the Reserve Bank of New Zealand last month, and the the New Zealand Commerce Commission last month, which found that deal was unlikely to substantially lessen competition in the personal or commercial insurance sectors.
The deal includes Wesfarmer's underwriting companies trading under the Lumley Insurance and WFI brands, as well as a 10-year distribution agreement with Coles Insurance.
Wesfarmers managing director Richard Goyder welcomed the confirmation from Mr Cormann, saying it cleared the way for expected completion of the transaction on June 30.
"Completing the regulatory process is pleasing and a key milestone on a transaction which we believe delivers value to our shareholders while offering the customers of our underwriting businesses the opportunity to become part of an established leading insurance organisation," Mr Goyder said.
In all the deal was subject to the approval of the Australian Prudential Regulation Authority, Australian Competition and Consumer Commission, Reserve Bank of New Zealand, New Zealand Commerce Commission, and New Zealand Overseas Investment Office, all of which have been progressively achieved over the past several months.