AUB and PSC scrap UK joint venture

Australian businesses AUB Group and PSC Insurance Group have scrapped plans for a joint venture that was set to include Tysers Insurance Brokers’ UK retail business.

AUB purchased Lloyd’s wholesale broker Tysers for AU$880m (£500m) in May 2022 – in March 2023, Tysers Retail Limited (TRL) was set up as a separate entity.

Following its launch, AUB entered into discussions about a possible future joint venture for TRL with PSC, an ASX-listed broker.

However, a statement released today (18 May 2023) said both companies would not proceed with the move following “extensive discussions”.

As a result, AUB will continue to own 100% of the Tysers business, including its UK retail arm.

Mike Emmett, AUB chief executive and managing director, said: “The business is pleased to be retaining 100% of Tysers UK Retail.

“It is a high-performance business which continues to demonstrate attractive profitability and is strategically aligned with AUB’s retail broking expertise.

“I would also like to compliment PSC for the professional and accommodating approach it has adopted throughout the process, respecting that the parties have been unable to reach an outcome that aligns to each group’s strategic objectives.”

Next steps

In its own statement, which was also released today, PSC said it had “formally ended discussions regarding the memorandum of understanding for the proposed joint venture on the Tysers Retail business”.

“The group has a solid pipeline of acquisitions and our balance sheet is in a strong position to continue to grow this with our selective and disciplined M&A strategy,” it added.

AUB said it was due to receive AU$100m (£53m) from PSC under the joint venture.

“Given the joint venture is not proceeding, AUB is undertaking an equity raising as a result of not receiving these proceeds and to increase financial flexibility and balance sheet strength,” it added.

It added TRL had “demonstrated strong performance and momentum” and was a “highly attractive business”.

“Owning 100% will enhance AUB’s strategic alignment with the rest of Tysers and AUB, with increased cross-sell opportunities,” AUB added.