Health insurer nib holdings announced on November 2 that it has agreed to buy New Zealand health insurance company Tower Medical Insurance for approximately $80 million (NZ $102 million).
Tower Medical is New Zealand's second largest health insurer, providing health cover to around 169,000 people where it has an annual premium revenue of approximately NZ $140 million.
The sale is subject to 'New Zealand regulatory approvals', where the purchase price may be adjusted based on completed accounts.
Nib's managing director Mark Fitzgibbon said the buyout was part of the nib's strategy in growing international earnings, with Tower Medical meeting the company's "strict investment criteria" in terms of investment returns and strategic rationale.
"With a market share of approximately 13%, Tower Medical provides an opportunity to emulate the success nib has achieved in Australia since its listing in 2007 through brand building, product design, distribution and outstanding customer service," he said.
"In addition to leveraging our own core capabilities, Tower Medical has had success working with financial advisers and we look forward to working with them to further develop this important distribution channel and grow market share."
Mr Fitzgibbon added that New Zealand is a market with similarities to Australia's "health insurance landscape" early last decade.
"There’s one dominant player, no obvious competitive tension and the Government knows budget constraints mean there must be more future private funding of healthcare."