MellonFinancial Corporation has moved to further refine its strategic position in Australia by exiting its Australian Human Resources and Investor Solutions business.
The company announced in late February that it had signed a definitive agreement to sell the Human Resources and Investor Solutions business to Mercer Human Resource Consulting — a move which will leave Mercer as arguably the largest stand-alone provider of outsourced superannuation services.
A spokesman for Mellon said that the sale of the business had been subject to a tender process, with the Mercer offer considered to be in the best interests of Mellon and the clients and staff of the Human Resources and Investor Solutions business.
Mercer Human Resources chief executive Peter Promnitz described the acquisition of the Mellon business as a “great fit” which would enhance Mercer’s position as a stand-alone outsourced superannuation provider.
The transaction will see around 200 Mellon personnel move under the Mercer umbrella — something which does not phase Promnitz.
He said that the acquisition looked extremely promising for Mercer both in cultural and technological terms, with both companies having used similar underlying technology platforms.
More importantly, Promnitz said the acquisition gave Mercer further scale.
“Mellon did not have the scale on its own, but this certainly gives it to us now,” he said.
According to Promnitz, the ability to provide stand-alone outsourcing services to Australian superannuation funds is significant in circumstances where there are around 150 funds that have made it clear it is not their intention to fold into master trusts.
The managing director of Mellon Australian Human Resources and Investor Solutions, Barry Rafe said it was intended to ensure a seamless transition for clients and staff.
“From a client perspective, it will be business as usual while the transition to Mercer takes place,” he said. “From a staff perspective, the Mercer agreement presents a great opportunity.”
Commenting on the transaction, Mellon’s vice chairman, Ron O’Hanley told Super Review that he believed Mercer represented a better owner for the business in circumstances where Mellon wanted to concentrate on its core competencies.
“It should certainly not be construed as a diminution of our interest in Australia, but rather a sharpening of focus on what we do best,” he said.
