ANZ has reached an agreement with Australia-based insurance company Suncorp Group to acquire the latter’s banking division, Suncorp Bank, for A$4.9bn ($3.35bn).
With the acquisition, ANZ is enabled to advance the growth of its retail and commercial businesses, alongside improving the geographic balance of its operations in Australia.
The transaction is expected to have a net impact on the company’s Level 1 and Level 2 CET1 by around 28bps and -34bps respectively, on a Pro-forma basis as of June 2022.
ANZ said that the acquisition is anticipated to be completed in the second half of the calendar year 2023, subject to certain closing conditions and approvals.
Upon closing, Suncorp Bank will continue its operations under its current CEO Clive van Hore, who will report to the CEO of ANZ.
The acquisition will not affect the Suncorp Bank business, with no changes to employment conditions that may result in any job cuts for at least three years after closing, said ANZ.
ANZ chief executive officer Shayne Elliott said: “The acquisition of Suncorp Bank will be a cornerstone investment for ANZ and a vote of confidence in the future of Queensland.
“With much of the work to simplify and strengthen the bank completed, and our digital transformation well-progressed, we are now in a position to invest in and reshape our Australian business.”
“We have admired the transformation that has occurred under the leadership of Steve Johnston and Clive van Horen and believe Suncorp Bank is a natural fit with ANZ given its culture, risk appetite and customer focus.”
Suncorp Bank offers home loans, savings and transaction accounts, credit cards and foreign currency services, alongside financial solutions to SMEs, commercial lending, and agribusiness banking.
The acquisition includes Suncorp Bank’s home loans with a strong risk profile, worth A$47bn, A$45bn in high-quality deposits and A$11bn in commercial loans.
ANZ intends to fund the acquisition by raising around A$3.5bn through an underwritten pro rata accelerated renounceable entitlement offer of its shares.
As per the entitlement offer, eligible institutional and retail shareholders can subscribe to one new ANZ share for every 15 ANZ shares held.
ANZ has announced an offer price of $18.90 per new share, which represents a 12% discount to the ex-rights price and a 12.7% discount to ANZ’s last closing share price on 15 July 2022.
The company will issue 187 million new shares under the entitlement offer which represents around 6.7% of ANZ’s existing shares on issue.
Earlier this month, ANZ confirmed that it is in talks with the US-based private equity firm Kohlberg Kravis Roberts (KKR) for the potential acquisition of MYOB.
MYOB offers business management, financial and accounting solutions for SMEs, enterprise and accounting practice customers.
