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Westpac and St George in merger discussions
Westpac has announced that it is in discussions with St George Bank concerning an all-scrip merger.
Westpac said the merger would “lower risks and costs for St George, and position the combined business to withstand challenging funding markets”.
A merger of the two businesses could cushion the blow of challenging credit markets for the predominantly home lending focused St George while creating more local opportunities for Westpac.
The announcement signals that Westpac’s growth strategy remains firmly focused on local, rather than international, markets.
Westpac has indicated that all Westpac and St George brands, which include BT, Asgard, Securitor and Bank SA, would be retained, with the businesses maintaining “unique identities and market positions”. Westpac also stated that all branch networks would be retained.
If the merger is successful, St George’s 9,000 employees would join Westpac’s 28,000 to service a combined customer base of 10 million.
The combined business would hold a 25 per cent market share of the home lending sector, and a wealth management business with funds under administration of $108 billion.
The merger requires approval from the regulatory authorities as well as from the Federal Treasurer.
Westpac has engaged Caliburn Partnership as financial adviser and Gilbert + Tobin as legal adviser.
Neither Westpac nor St George Bank was available for comment this morning.
12 May 2008
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