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

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]