ANZ confirmed it's paying a chunky $4.9 billion to buy Suncorp's banking arm.
👉 Background: We mentioned ANZ's shopaholic tendencies yesterday, and just hours later, ANZ confirmed it will pay a chunky $4.9 billion to buy Suncorp's banking arm.
👉 What happened: This is the first big acquisition from a major bank since way back during the GFC. Back then, Commbank bought Bankwest and Westpac bought St George.
👉 What else: ANZ will raise $3.5 billion from investors to seal the deal and get the opportunity to grow its customer base in Queensland and NSW. But it's also keen on the 'synergies' this deal presents.
💡 M&A synergies are the financial benefits when two companies combine. It's also a major corporate buzzword used to make everyone sound a little bit smarter.
💡There are a few ways these synergies work, but it usually comes down to gaining more efficiency or scale. Maybe you’re reducing overhead costs, maybe you’re sharing technology, or maybe you’re combining talent resources.
💡ANZ’s estimating the annual cost synergy of this merger will be around $260 million pre-tax. But it may take six years to realise that benefit. So ANZ is going to have to be patient to reap the rewards.
Sign up for Flux and join 100,000 members of the Flux family
