The privatization of Medibank, Australia’s largest health insurer, has progressed once more, as the Australian government has chosen a financial advisor. On Friday, November 29th, the government confirmed that it had hired on Lazard to advise on the sale and Herbert Smith Freehills to advise on legal matters. The other top contender in this “very competitive” selection process was Rothschild.
Now that advisors have been chosen, the sale will move forward, with a scoping study planned for completion by February next year. The privatization of Medibank has been on the Australian government’s radar for many years as a hotly contested subject between parties. The current government hopes that the sale will allow the private health insurance sector to become more efficient, competitive, viable, and high quality.
Medibank has over 3.6 million members under a total of two brands. It also controls nearly a third of the market share of the private insurance market in Australia. With more than 120 branches, Medibank sells a variety of insurance types, including health, life, travel, and pet insurance.
One of the top priorities for the government throughout this whole process is ensuring that Medibank’s 4,800 employees are treated fairly. The government also wants to reduce liabilities and risk to the Commonwealth, while at the same time maximizing the profits from Medibank’s sale.
“We’re committed to the privatization of Medibank Private,” stated Tony Abbot just a week before his victory at the polls in September. “We will put it into the private sector at what is the best time for Commonwealth taxpayers.”