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)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.