Demutualised Companies 1996-2019 (see table below)

The demutualisation of the life offices (AMP, National Mutual and Colonial Mutual) has significantly boosted market capitalisation and increased the number of shareholders over the past twenty years. The big advantage for members has been the exchange of an interest that could not be traded, for shares that are listed on the Australian Securities Exchange. Demutualisations included in our report include: 

However, when they come to sell the shares in these companies, as a general rule, shareholders are subject to Capital Gains Tax. Even though nothing was paid for the shares, they have a value for CGT purposes, which is reflected as “Acquisition Cost per share” in the table below. That acquisition cost may be only a part of the cost base which can be deducted from the capital proceeds to arrive at the capital gain. The cost base may also include costs associated with the sale of the shares such as fees paid to a broker.

Easier access to investment capital from 2019

Some co-ops and mutuals growing into nationwide organisations such as health insurer HCF and healthcare, financial services and retirement living group Australian Unity, have been unable to access equity markets due to their corporate structure. In the past, member-based organisations have only been able to raise funds by increasing debt, which has tended to put a lid on growth and even led some to demutualise.  Changes to the Corporations Act in 2019 created a “new and unique” mutual capital instrument (MCI) that enables these entities to access investment capital according to Melina Morrison, Chief Executive of the Business Council of Co-operatives and Mutuals.

Changes for private health insurers

Effective 1 July 2007, changes were made to the law relating to the capital gains tax (CGT) treatment of policy holders of health insurers who receive cash or shares when their health insurer demutualises. Under the new law, policy holders disregard any capital gains and losses that arise when a private health insurer demutualises. The changes apply for example to the demutualisation of NIB, MBF and AHM, see table.

Changes for friendly societies

Capital gains and capital losses arising to members and insured entities when their friendly society demutualises to a for‑profit entity will be disregarded except when the member or insured entity receives an amount of money under the demutualisation.

Below is a small selection of demutualisations of the past thirty five years. For the full table please click on the link below: