Financial earthquake as ANZ announces it will BUY another major Australian bank for $4.9BILLION: Here’s what it means for customers
- ANZ buying Queensland bank Suncorp for $4.9billion to grow home loan profile
- Major bank has committed to keeping Suncorp branches open for three years
- Deal marks biggest takeover since Westpac bought St George in late 2008
- ANZ is buying Suncorp Bank from Suncorp Group but not Suncorp insurance
- ANZ shares have been place into trading halt as it embarks on a capital raising
- Suncorp shares surged by 6.49 per cent to $11.82 in opening half hour of trade
ANZ will buy smaller rival bank Suncorp for $4.9 billion in a bid to take on a greater share of Australia’s home loan market.
Suncorp customers may see little difference in services in the short term, with ANZ committing to keep the company’s bank branches open for at least three years.
ANZ, one of Australia’s big four banks, has also licensed the Suncorp name for five to seven years, which will see the big bank pay the smaller player an annual $10million fee.
The deal will see ANZ buy Suncorp Bank from Suncorp Group but not its insurance arm, with the major bank embarking on a $3.5billion capital raising drive from its shareholders.
ANZ made a major move on Monday – announcing it will purchase rival bank Suncorp for $4.9billion
ANZ chief executive 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.
ANZ buys Suncorp
ANZ buying Suncorp Bank for $4.9billion, which is a $1.3billion goodwill premium over net tangible assets
ANZ in trading halt in Australia and New Zealand until July 21 as it embarks on a $3.5billion capital raising from its shareholders
ANZ has promised its won’t close Suncorp Bank branches or retrench staff for three years
ANZ also paying a licence fee to use Suncorp name for at least five years at an average cost of $10million a year
‘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.’
Suncorp said its insurance operations in both Australia and New Zealand would not form part of the ANZ transaction, adding its group head office would continue to remain in Queensland.
ANZ cash purchase of Suncorp Bank for $4.9billion represented a $1.3billion goodwill premium over Suncorp’s net tangible assets.
The news has caused a 6.49 per cent surge in Suncorp’s share price to $11.82 in the opening half-hour of trade on the Australian Securities Exchange as the broader S&P/ASX200 went up by 0.75 per cent.
ANZ shares were placed in a trading halt until July 21 in Australia and New Zealand as it embarks on a $3.5billion capital raising.
Shareholders will be eligible for one new ANZ share for every 15 ANZ shares they hold on July 21, at 7pm Melbourne time.
Suncorp will also be run as a separate banking entity for three years with ANZ committing to no net job losses or branch closures for three years after the transaction is completed.
Suncorp customers may see little difference in services in the short term, with ANZ committing to keep the company’s bank branches open for at least three years (pictured is a Brisbane branch)
Under the deal, ANZ will pay Suncorp Group a licence fee for five to seven years to use its name.
That means ANZ will be paying a minimum fee of $50million to use the Suncorp Bank brand, averaging out at $10 million a year under a brand licence agreement between Suncorp Group and ANZ.
Should this licensing agreement be extended, Suncorp will receive an additional fee of $10 million a year.
ANZ’s acquisition of Suncorp marks the biggest takeover of a smaller bank by one of the big four since Westpac in December 2008 acquired St George.
Westpac’s then chief executive Gail Kelly had previously run St George.
The Commonwealth Bank in 2008 bought Perth-based lender BankWest and in 2013 completely took over mortgage broker Aussie Home Loans, established by John Symond in 1992.
ANZ chief executive 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’