Westpac, one of the front-runners tipped to buy Royal & SunAlliance's businesses in Australasia, has reportedly pulled out of the race.
RSA's parent company, which is listed on the London Stock Exchange has been selling assets all around the world to strengthen its financial position. It has promised to free up £800 million of capital by selling non-core assets. In the UK it has sold funds management operations.
One of the assets on the market is its life insurance and funds management operations in Australia and New Zealand.
The New Zealand operations, which include Guardian Trust, are said to be worth around $350 million, while its Australian life insurance operations could raise more than $1 billion.
According to a Dow Jones report interested bidders are pulling out of the race, and it is consequently becoming harder for RSA to sell its Down Under assets.
Speculation Westpac has pulled back from RSA centres around two things. This week it bought a 51% stake in Hastings Funds Management in Australia, and it is committed to acquiring the rest of the group over a period of three years.
Secondly, it was pushing for a break up of RSA, and bid for just some assets. However, it is again speculated that the RSA doesn't want to break up the Australian and New Zealand assets.
Reports out of Australia also say that ANZ Bank's funds management joint venture with ING has also decided against bidding for Royal & SunAlliance.
The front runners to acquire RSA are British-based HSBC Holding and US-based MetLife.
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