KiwiSaver provider Kiwi Wealth has been sold to Fisher Funds for $310 million.
Kiwi Wealth is part of the state-owned Kiwi Group Holdings, which includes Kiwibank, and the sale to Fisher Funds was widely tipped with the price at the lower end of expectations.
Kiwi Group chair Dame Paula Rebstock said the sale was positive for Kiwi Wealth, a default provider, because it would be able to expand within Fisher Funds as it was gradually integrated.
"Kiwi Wealth's more than 270,000 members will be gaining access to Fisher Funds' award-winning advice and active investment team."
Fisher Funds is understood to headed off competing bids from Jarden Securities and local KiwSaver provider, Booster.
Fisher Funds chief executive Bruce McLachlan said the acquisition fitted its long-term growth plans in KiwiSaver and funds management in New Zealand.
"This is an exciting moment for Fisher Funds and will further strengthen our position as a leader in New Zealand's active funds management business."
Fisher Funds is the fourth biggest KiwiSaver provider and is controlled by the Toi Foundation, which owns the New Plymouth TSB Group. An American investment group TA Associates has a 34 percent stake in Kiwi Wealth, which means the sale will also need Overseas Investment Office approval.
The deal will enlarge Fisher's funds under management by about $6.34b to $12.8b, catapulting it into the third biggest provider, and also give it back access to default Kiwisaver provider status, which it lost last year in a revamp because of its higher fees.
"Our priority is now on working closely with Kiwi Wealth to ensure a seamless transition for all members and clients involved," McLachlan said.
Kiwibank will have an arrangement to refer its customers to Fisher Funds for investment products.
Once the deal is completed, Fisher Funds and Kiwi Wealth said they would start working on identifying opportunities to grow the value of the combined businesses.
McLachlan said the two firms were complementary and it would be business as usual in the near term at least, but there would be some job losses as the two integrated.
"There is duplication and because of that there will be some roles that go, but it's not a cost out exercise ... a significant number of Kiwi Wealth team will be retained as will a material Wellington presence, that's our promise and that's what we'll deliver."
Kiwi Wealth's default status, which meant new investors not making a choice of fund manager were allocated to one of six providers, was not the prime reason for the acquisition, although Kiwi Wealth's lower fee structure would be retained, he said.
Work would start this week in getting the necessary approvals to retain the default status, he said.