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- Big Four bank ANZ (ANZ) signs a deal to buy Suncorp’s (SUN) banking business for $4.9 billion as ANZ expands its operations in the Queensland market
- ANZ is looking to raise around $3.5 billion to support the buy through an entitlement offer which will allow investors to buy one new share for every 15 shares held
- As part of the deal, Suncorp will continue to be led by CEO Clive van Horen, who will report to the ANZ Chief and join the bank’s executive committee once the sale is complete
- The purchase requires approval from the Australian Competition and Consumer Commission (ACCC)
- ANZ shares are in a trading halt while the company completes its $3.5 billion capital raise and last traded at $21.64 on July 15
Banking giant ANZ (ANZ) has signed a deal to buy Suncorp’s (SUN) banking business for $4.9 billion as it expands its operations in the Queensland market.
To help pay for the purchase, ANZ is looking to raise around $3.5 billion through a fully underwritten entitlement offer which will allow investors to buy one new share for every 15 shares held.
New shares will be offered at $18.90 — a 12.7 per cent discount to ANZ’s last trading price.
Under the deal, Suncorp’s banking arm will continue to operate under Suncorp brand for five years and will continue to be led by CEO Clive van Horen.
ANZ CEO Shayne Elliot said ANZ would not close any Suncorp branches in Queensland for at least three years from the completion of the deal.
“The acquisition of Suncorp Bank will be a cornerstone investment for ANZ and a vote of confidence in the future of Queensland,” Mr Elliott said.
“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. This will result in a stronger more balanced bank for customers and
shareholders.”
The deal is targeting an increase in ANZ’s presence in the home loan market, where it is currently the fourth-biggest lender in the country. The Suncorp Bank purchase includes $47 billion in home loans, $45 billion in deposits and $11 billion in commercial loans.
Suncorp said the purchase continued to reshape and simplify the group and positioned both its insurance and banking businesses for ongoing growth.
“Both businesses will benefit from a singular focus on their growth strategies and investment requirements,” Suncorp Chairman Christine McLoughlin said.
“We believe the agreed price fairly values the bank and reflects the hard work of our people and progress made on delivering our strategic objectives.”
The purchase will require approval from the Australian Competition and Consumer Commission (ACCC).
Additionally, ANZ has pulled out of discussions with KKR about a potential purchase of accounting software group MYOB. No further details were released about the deal.
ANZ shares have now entered a trading halt while the company completes its $3.5 billion capital raise and last traded at $21.64 on July 15.
