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Highlights:
- ANZ has signed an agreement with Suncorp to purchase Suncorp’s banking operations for AU$4.9 billion.
- The acquisition features AU$47 billion of home loans, AU$45 billion in high quality deposits and AU$11 billion in commercial loans.
- Suncorp’s insurance business will not be a part of this deal.
- To fund the acquisition, ANZ has announced an entitlement offer to raise AU$3.5 billion.
- This acquisition is expected to accelerate retail and commercial business of ANZ.
One of the largest banks in Australia, Australia and New Zealand Banking Group Limited (ASX:ANZ) has struck a significant deal with Suncorp Group (ASX:SUN), as per which, SUN will be selling off its banking business to ANZ.
The transaction cost, according to the ASX announcement, stands at AU$4.9 billion.
At 12:06 PM AEST, SUN shares were spotted trading 5.855% stronger at AU$11.750 apiece while, ANZ shares were on a trading halt. ANZ shares are expected to commence normal trading on the ASX after completing the institutional component of the entitlement offer.
ANZ shares last traded at AU$21.640 per share on 15 July 2022.
Proposed acquisition of banking arm of Suncorp
According to the ASX announcement, ANZ has agreed to buy Suncorp Bank in an AU$4.9 billion deal from Suncorp Group Limited (ASX:SUN). This acquisition is expected to elevate the retail and commercial business and raise the business’s geographical balance across Australia.
The combination of ANZ and Suncorp Bank would attain number three ranking in household deposits and household lending, said ANZ.
ANZ said that Suncorp Bank is a ‘high quality Australian banking franchise’. It has around 1.2 million customer relationships, circa AU$47 billion in home loans, AU$11 billion in commercial loans and AU$45 billion in high-quality deposits. The business has good momentum, especially in home loans.
Reportedly, CEO, Clive van Horen would lead the Suncorp Bank and would report to ANZ’s CEO. After completing the transaction, Horen will join ANZ’s executive committee. The announcement highlights that the transaction is expected to have no impact on the employment conditions of the team members. In addition, no net job losses would occur in Queensland for Suncorp Bank for a minimum of three years after the completion of the transaction.
As per today’s release, the transaction is subject to certain conditions and a minimum completion period of one year. ANZ expects to complete the transaction by the second half of the calendar year 2023.
To fund the transaction, ANZ has announced a capital raise of AU$3.5 billion.
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Equity raising
ANZ aims to raise AU$3.5 billion via a fully underwritten pro rata accelerated renounceable entitlement offer. In this capital raise, the eligible retail and institutional shareholders would receive one new ANZ share for 15 ANZ shares held as of 21 July 2022 at 7:00 PM (Melbourne time).
The offer price of the entitlement offer is AU$18.90 per new share, and around 187 million new shares would be issued.
The institutional entitlement offer has opened today and will close on 19 July 2022.
