Herbert Smith Freehills advises IAG on 25-year strategic alliance with RACQ

Herbert Smith Freehills is pleased to have advised IAG on its $855 million strategic alliance with RACQ. The strategic alliance is by way of an up-front acquisition of 90% of RACQ’s insurance underwriting business and a 25-year exclusive distribution agreement with RACQ, with an option to acquire the remaining 10% on consistent terms.

IAG is one of Australia’s leading general insurance providers, and its partnership with RACQ, Queensland’s largest club and motoring organisation, with around 1.7 million members, is an exciting opportunity to build on its strength in member-focused organisations.

The acquisition and distribution agreement form the bedrock of a 25-year exclusive strategic alliance, under which IAG will provide RACQ general insurance products for RACQ members and Queenslanders. The partnership will leverage RACQ’s strong brand and customer relationships, alongside IAG’s financial strength, underwriting expertise and best-in-class technology, to drive significant synergies and capitalise on strong growth in the Queensland market.

The Herbert Smith Freehills team advising IAG was led by Corporate partner Mia Harrison-Kelf, with Chair and Senior Partner Rebecca Maslen-Stannage, and support from partners Patrick Gay (Competition), Drew Pearson (Employment), Peter Jones (TMT) and Toby Eggleston (Tax). They were supported by executive counsel Daniel Johnson and Sophie Beaman, senior associates Wendy Tian, Shan-Verne Liew, Samuel Gonski and Gabrielle Doyle, and solicitors Hamish Cullity, Lana Ou, Eric Kong, Elisa Wong and Alexia Psaltis.

Ms Harrison-Kelf said, “It was a pleasure to work with the IAG team to deliver this strategic alliance in the Queensland insurance market. Their highly practical approach and clear strategic vision made them fantastic to work with. We were proud to see the Herbert Smith Freehills team come together seamlessly to implement this complex transaction”.

This deal is the latest example of HSF’s market-leading work in M&A, including in the insurance sector. Other examples include the firm advising:

• The Ardonagh Group on its A$2.43 billion acquisition of PSC Insurance Group Limited, and
• TAL on the acquisition of 100% of Westpac’s Australian life insurance for A$900 million.