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Private Equity Firms Walk Away from $5 Billion Bid for Insurance Broker AUB

In a surprising turn of events, two major private equity suitors have abandoned their proposed $5 billion buyout of Australian insurance broker and underwriter AUB Group. After more than a month of due diligence, Sweden's EQT and CVC Capital Partners have informed AUB that they will not be proceeding with their $45 per share acquisition offer.

The decision marks a significant setback for AUB, which had been seen as an attractive target given its diversified insurance business and strong market position. Industry sources indicate that the private equity firms ultimately deemed the price tag too high relative to AUB's fundamentals and growth prospects.

"The parties have agreed to terminate discussions," AUB said in a statement on Monday, providing few additional details on the breakdown of negotiations. Representatives for EQT and CVC declined to comment.

The failed takeover attempt comes amid a broader cooling of M&A activity in the insurance sector, as rising interest rates and economic uncertainty prompt buyers to take a more cautious approach. Recent data shows a 23% decline in global insurance-related deals so far this year compared to 2024.

"Private equity firms are being much more selective and disciplined in their acquisition targets, especially for assets in mature, competitive markets," said Oliver Matthews, a partner at consultancy firm McKinsey. "The math has to truly work from both a strategic and financial perspective."

AUB, which provides insurance broking, underwriting and other services across Australia and New Zealand, had seen its shares surge over 30% on the initial buyout rumors in October. With the proposed deal now abandoned, its stock is expected to pull back significantly when markets reopen.

The failed takeover attempt also raises questions about AUB's long-term growth trajectory and ability to navigate an increasingly challenging industry landscape on its own. The company will need to reassure investors about its standalone prospects, particularly as larger global players continue to consolidate the fragmented insurance broking market.

"This was a prime asset that should have attracted strong interest, so the fact the deal fell through is certainly concerning," said one Sydney-based fund manager who owns AUB shares. "The company will need to demonstrate it can deliver sustainable value as an independent player."