Wesfarmers will sell the remainder of its insurance division in a deal worth $1.16 billion.

The conglomerate will sell its insurance broking and premium funding business to US-based insurance broking giant Arthur J Gallagher and Co.

Under the deal, Wesfarmers will receive $1.01 billion for the business, plus a distribution of about $150 million to repay funding for the operations.

The sale will need approval from the Australian Foreign Investment Review Board as well as regulators in New Zealand and the UK.

The move follows the sale of the company’s Australian and New Zealand underwriting businesses to Insurance Australia Group, which is still subject to regulatory approvals but has received the green light from the Australian Competition and Consumer Commission.

If both sales go ahead, Wesfarmers will have received a total of around $3 billion for its insurance division, which would be a pre-tax profit of up to $1.085 billion.

Wesfarmers managing director Richard Goyder said the decision to sell the insurance business was consistent with the company’s focus on disciplined portfolio management.

“We believe this sale agreement with Arthur J. Gallagher & Co. is in the best interests of our shareholders while offering the customers and employees of our insurance broking and premium funding businesses the opportunity to join a leading global insurance broking company with ambitions to expand in Australia and New Zealand,” Goyder said.