Wesfarmers has agreed to sell its insurance broking and premium funding operations to subsidiaries of American broking giant Arthur J Gallagher for $1.01 billion.
In a statement, Wesfarmers said it will also receive a distribution of approximately $150 million to repay funding of the premium funding operations.
The retailer expects to record a pre-tax profit of approximately $310m to $335m on the sale of OAMPS Insurance Brokers Australia, OAMPS UK, Crombie Lockwood in New Zealand, Lumley Finance and Monument Premium Funding.
The sale is subject to approval from the Foreign Investment Review Board and regulatory bodies in the United Kingdom and New Zealand.
Wesfarmers expects it will take several months to achieve satisfaction of all conditions precedent.
The news follows Wesfarmers' sale of its insurance underwriting business to IAG for $1.845bn, cleared by the consumer watchdog last month.
Wesfarmers now faces the rather pleasant dilemma of either returning capital to shareholders or looking for another acquisition.
Wesfarmers said the sales to IAG and Arthur J Gallagher constitute the entire operations of its insurance division and in aggregate are expected to provide pre-tax proceeds of approximately $3bn and result in a pre-tax profit of approximately $1.01bn to $1.085bn.
Wesfarmers managing director Richard Goyder said the sale agreement was consistent with the company's focus on disciplined portfolio management.
"We believe this sale agreement with Arthur J Gallagher & Co is in the best interests of our shareholders while offering the customers and employees of our insurance broking and premium funding businesses the opportunity to join a leading global insurance broking company with ambitions to expand in Australia and New Zealand," Mr Goyder said.