The AMP Ltd (ASX: AMP) share price is on the slide on Monday.
At the time of writing, the financial services company’s shares are down 1% to 94.5 cents.
Why is the AMP share price falling?
Investors have been selling down the AMP share price today in response to the release of an announcement.
According to the release, AMP has successfully completed the sale of its Global Equities and Fixed Income (GEFI) business to Macquarie Asset Management (MAM), which is part of Macquarie Group Ltd (ASX: MQG).
This sale, which was first announced in July 2021, will see assets under management (AUM) of ~A$47 billion transfer from AMP Capital to MAM, subject to unitholder approvals.
How much will AMP receive?
As for AMP, following the completion of the transaction, it will receive a net completion amount of approximately A$63 million in cash from MAM.
This is down from a previous estimate of A$110 million, which management advised reflects the expected post completion adjustments. It further explained that this reduction from the total potential proceeds reflects reductions in AUM and client pricing changes since the sale agreement.
Nevertheless, AMP still remains eligible for the further cash earn-out up to A$75 million, payable after the second anniversary of transaction completion. This is subject to certain conditions including revenue targets. Though, it warned that the amount remains uncertain with the retention of AUM being the main driver.
AMP Capital’s Chief Executive, Shawn Johnson, commented: “The completion of the GEFI transaction is a key milestone in Collimate Capital’s separation from AMP and preparation for demerger. Our teams have been actively working to ensure a smooth transition of funds and clients and we’re confident that MAM, and our talented teams who are transferring, will deliver great outcomes for them. We would like to thank the Macquarie team for the partnership through the transaction and wish our people joining their team every success.”
The post AMP (ASX:AMP) share price lower on asset sale news appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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