ANZ to acquire Suncorp's banking arm in A$4.9B deal

Australia and New Zealand Banking Group Ltd. confirmed it will acquire the banking unit of Suncorp Group Ltd. for A$4.9 billion.

After the sale closes, Suncorp Bank will operate under the deposit-taking institution license of Australia and New Zealand Banking Group, or ANZ, for at least three years, and will continue to operate under the Suncorp brand for five years, according to separate July 18 releases.

To fund the acquisition, ANZ will use existing capital and raise about A$3.5 billion of ordinary equity through a fully underwritten pro rata accelerated renounceable entitlement offer.

As part of the entitlement offer, ANZ will issue approximately 187 million shares at A$18.90 apiece, which represents about 6.7% of the company's existing shares on issue. Eligible institutional and retail shareholders can subscribe to 1 new ANZ share for every 15 ANZ shares held as of July 21.

The institutional component of the offer opens July 18 and closes July 19. Eligible institutional shareholders can choose to take up all, part or none of their entitlements.

Meanwhile, retail shareholders in Australia and New Zealand on the record date can participate in the retail component of the entitlement offer, which opens July 29 and closes Aug. 15.

The deal is expected to be completed within 12 months, subject to regulatory approvals.