NU Online News Service, Aug. 26, 10:25 a.m. – The Principal Financial Group Inc., Des Moines, Iowa, has agreed to sell most of the BT Financial Group operations it owns in Australia to Westpac Banking Corp., Sydney, for the equivalent of about $500 million in U.S. dollars in cash.

Principal could also get a future payment of up to $80 million if Westpac has good luck with expanding BT Financial’s retail mutual funds, Principal says.

The agreement calls for Westpac to buy all of the Australian BT Financial’s retail funds, wrap accounts and Australian stock and bond businesses. The agreement also includes the Australian BT Financial’s operations in New Zealand.

Principal plans to keep the Australian BT Financial’s real estate, international fixed-income and currency operations.

Principal says it is making the deal because it prefers to focus on the U.S. retirement services market and the company’s international businesses in Asia and Latin America.

Principal acquired the Australian BT Financial operations from Deutsche Bank A.G., Frankfurt, in 1999 for $1.4 billion.

Principal says it will probably record an after-tax loss of about $350 million on the sale of the Australian BT Financial operations, but it predicts the deal will bring in about $750 million in cash, after including the tax effects and other accounting effects.

Principal could use the proceeds to invest in its existing businesses, make small acquisitions or buy back its own shares, the company says.

Westpac plans to keep Rob Coombe, BT’s head of retail, and Craig Stobo, BT’s New Zealand chief, but at least three other top BT executives will be moving on, Principal says.

The departing BT executives are Ian Martin, BT’s chief executive officer; Graeme Fowler, BT’s chief operating officer; and Gary Symons, BT’s chief investment officer.