ANZ buys remaining half of ING for $1.86bn

Tuesday October 6, 2009

ANZ bank has announced today to the ASX that it has officially bought the remaining half of it joint venture partner,ING Group, as it moves into the wealth management industry in Australia. ANZ paid $1.76 billion for the other half of ING Australia and ING (NZ) Holdings, which will now be wholly owned subsidiaries of ANZ. ANZ bank had previously owned 49 per cent of ING, buying the remaining 51 per cent.

The price tag of $1.76 billion was based on the group's normalised 2008 earnings at a rate of eleven times while also being 1.2 times the embedded value as of December 31, 2008. In the ANZ bank's statement the bank said that it expects the new acquisition to be bringing in group profits in the first year of full ownership, adding to ANZ already sizeable market share in the life insurance and retail funds management market in Australia where it holds the third and fifth position respectively.

The $1.76 billion will be funded by internal capital.

ANZ chief executive Mike Smith said "Moving to full ownership of the wealth management and life insurance joint ventures significantly strengthens our position in wealth management with a business we know well,''.

"The value proposition is also compelling with an attractive purchase price combined with significant revenue opportunities and selected cost synergies.''

"Similar to the recent RBS Asia acquisition, ANZ has been able to take advantage of the global financial crisis and ANZ's strong balance sheet to advance our strategy.

"It brings certainty to our wealth management position through ownership of an established specialist wealth management and protection business with a 120-year history in Australia, most recently as ING and previously as Mercantile Mutual."

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