Australia and New Zealand Banking Group (ANZ) is closing in on a deal to sell its entire Malaysian banking stake and exit the Southeast Asian nation, in a transaction that could be worth around US$900 million.
ANZ has been looking to sell its 23.8 percent stake in AMMB Holdings (AmBank) since early last year as part of its strategy to divest their minority stakes in Asia. Another reason being that the bank was involved in a wide-ranging corruption scandal at state fund 1MDB.
Relatedly, AmBank has been in merger talks with RHB Bank since June whereby RHB will be acquiring AmBank in an all-share deal valued at about US$9 billion.
AmBank Group’s Chief Executive Officer, Datuk Sulaiman Mohd Tahir has been optimistic about the agreement as he explained that, “the proposed merger with RHB Banking Group will create a stronger business and financial presence.”
If successful, the merger between AmBank and RHB Bank would create the country’s fourth largest bank by asset size. With the envisaged transaction, ANZ’s stake is expected to be roughly 10 percent in the merged entity.
It is precisely this potential merger of the two Malaysian banks that offer ANZ a chance to divest its 23.8 percent stake in AmBank to Malaysian retirement fund KWAP, which already owns small stakes in both RHB and AmBank.
According to sources, KWAP has always held an aspiration to hold a significant investment in a financial institution. The company had considered purchasing part of ANZ’s stake two years ago but was not agreeable to the pricing until now.
As of late, both firms have “agreed in principle” to the deal at a price equivalent to one-time book value of AmBank.