Under the arrangement Principal will keep BT's A$40 billion funds management business in Australia and New Zealand and it will on-sell BT's investment banking operation to Macquarie.
The funds management deal is being portrayed as an excellent outcome for BT, as it would remain a separate entity in the market, as opposed to being swallowed up by one of the Australian banks.
BT's owner, Deustche is expected to reap more than A$2 billion from the sale.
Earlier this month the initial sale process for BT fell-over after the bidders, which included Principal and Westpac, pulled out. The reasons for the earlier sale collapse are rumoured to centre around price and potential management conflicts.
Principal is an insurance and funds management business based in Des Moines, Iowa. It is a similar size to AMP Ltd and is a Fortune 500 company.
Funds under management at the end of December totalled US$82.3 billion, it has 16,000 staff and about 10 million customers.
Further details on the sale will be available on Good Returns as soon as they come to hand.
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