0153 GMT - Insurance Australia Group aims to pay for two deals with Australian motoring clubs using existing capital, but Morgan Stanley sees little margin for error. IAG yesterday unveiled a deal worth A$1.35 billion to acquire the insurance business of The Royal Automobile Club of Western Australia, or RAC, and license its brand. That follows IAG's A$855 million deal in November with motoring club RACQ to expand its general-insurance business in Queensland. Analyst Andrei Stadnik says IAG's funding plan carries risks to dividend expectations and could lead to an equity raising. "Our forecasts have IAG generating A$700 million of capital assuming 70% dividend payout, the middle of the 60-80% target range or a A$50 million buffer," MS says. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
May 15, 2025 21:53 ET (01:53 GMT)
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