Insurance Australia Group Ltd (ASX:IAG) announced on Thursday it has agreed to buy the insurance unit of the Royal Automobile Club (RAC) of Western Australia. Alongside this, IAG will enter a licensing and distribution agreement with RAC.
Under the terms of the deal, IAG will pay a total of A$1.35 billion (about $867.4 million). This includes A$400 million for RAC Insurance itself and A$950 million for the licensing rights.
This move follows earlier reports that IAG was interested in acquiring RAC, one of Western Australia’s largest insurance providers. If approved by regulators, this acquisition will strengthen IAG’s position as the biggest insurer in Australia.
RAC had begun a strategic review of its business in late 2024 and was reportedly looking for buyers. The club offers insurance policies covering a variety of needs, including car insurance and pet insurance.
Earlier in November, IAG announced it would acquire a 90% stake in RAC Queensland’s insurance underwriting business, marking another step in its expansion.
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