Major bank's $8 billion loan sale transforms M&A activity

A major loan deal between two of Australia’s largest lenders helped bolster the value of corporate deals in the financial services sector in the 2016 financial year.

Released last week, the Mergermarket trend report FY 2016 found that in the lead up to the federal election (on July 2 2016), the Australian M&A market has been “tepid” in FY16.

The report noted that a total of 436 deals worth $85.3 billion have been announced, an 8.8 per cent decline compared to deal values in FY15 ($93.5 billion, 513 deals).

However, financial services bucked the trend, recording a 17.2 per cent share of all Australian M&A deals in 2016, up from 3.6 per cent for the 2015 financial year.

“With the announcement of the $8.2 billion acquisition of dealer finance business of Esanda Finance Corporation Limited by Macquarie Group, the financial sector ($14.7 billion, 39 deals) jumped to third place in terms of deal value, a significant 3.4x increase compared to the sector’s deal value in FY 2015 ($3.4 billion, 34 deals),” the report said.

ANZ announced the sales of its Esanda Dealer Finance portfolio to Macquarie Bank back in October. The portfolio included net lending assets of $7.8 billion, comprising retail point-of-sale auto finance of $6.2 billion, and wholesale bailment facilities and other Esanda branded finance offered to motor vehicle dealers of $1.6 billion.

The total purchase price for the portfolio is $8.23 billion.

Meanwhile, real estate ($1.3 billion, 9 deals) saw an 89.9 per cent slump in terms of deal value compared to the previous fiscal year ($13.0 billion, 11 deals), according to the report.

In the mortgage space, ASX-listed diversified financial services group Yellow Brick Road snapped up South Australian mortgage manager Loan Avenue in June, following the acquisition of an online investment company in March.

[Related: ANZ sells $8.2 billion loan portfolio]

 

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