Japanese bank Mitsubishi UFJ Trust and Banking Corporation (MUTB) has completed its acquisition of Colonial First State Global Asset Management (CFSGAM) from Commonwealth Bank of Australia (CBA).
The transaction sees the Mistubishi UFJ Financial Group-owned bank gain the nine Colonial First State subsidiaries that form the global asset manager. It received regulatory approval two weeks ago.
The final sale proceeds subject to completion adjustments are $4.2 billion, representing 19.4 times CFSGAM’s FY19 net profit after tax of $218 million. CBA is looking at a post-tax gain on sale of around $1.5 billion.
Initially CBA had sold CFSGAM for $2.9 billion, more than 17 times CFG’s annual profit.
CBA chief executive Matt Comyn said the transaction was an important milestone toward the bank’s strategy to simplify.
“The sale of CFSGAM to MUTB creates significant value for CBA shareholders and is a positive outcome for CFSGAM clients and employees,” Mr Comyn said.
The bank is expecting the transaction to deliver an increase of approximately $3.1 billion to its required capital, resulting in a pro forma uplift to the group’s common equity tier 1 ratio of 68 basis points on an APRA basis, based on the group’s risk weight assets as at 31 March.
CFSGAM, first established in 1998, reported it manages $204.2 billion in assets under management as at 31 December 2018. The business has 800 staff across 11 offices in Asia, Australia, Europe and North America.
MUTB on the other hand, is one of Japan's largest asset managers, holding $641 billion in assets under management as at December. The company was reported to represent a 98 per cent market share for mutual funds and 25 per cent for pension funds in Japan.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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