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Shinsei to buy New Zealand's UDC Finance for $480 million, its biggest overseas deal

Stock MarketsJun 01, 2020 11:30PM ET
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2/2 © Reuters. FILE PHOTO: The Shinsei Bank logo is pictured at the lobby of the bank in Tokyo 2/2

By Byron Kaye and Takashi Umekawa

SYDNEY/TOKYO (Reuters) - Shinsei Bank Ltd (T:8303) said it will buy New Zealand's top non-bank finance provider, UDC Finance Ltd, for $480 million in its biggest overseas acquisition to date and marking the latest asset purchase by a Japanese company eager to move beyond a low-growth home market.

The planned sale also relieves owner Australia and New Zealand Banking Group Ltd (AX:ANZ) of an asset it has tried to offload several times, part of a broad push by Australia's banking sector to focus on core services like mortgages and to limit regulatory problems.

The NZ$762 million price tag is higher than the $NZ660 million that New Zealand media said China's HNA Group had agreed to pay before the deal was blocked by a New Zealand regulator in 2017.

Shinsei said small-scale finance was a focus area and UDC, which sells auto and machinery financial products, was similar to several of its domestic finance units.

"Through this stock acquisition, and by leveraging its expertise in small-scale finance business, Shinsei Bank envisages further growth of UDC in New Zealand where the GDP growth rate is relatively high among the developed countries," it said in a statement.

The deal value tops Shinsei's roughly 40 billion yen ($370 million) purchase of a stake in Taiwanese bank Jih Sun Financial in 2006.

Japanese companies have been keen to tap offshore markets for growth due to thin margins and an ageing population at home.

Last year, Mitsubishi UFJ (NYSE:MUFG) Financial Group (T:8306) bought an asset management business from Australia's biggest lender, Commonwealth Bank of Australia (AX:CBA), for $2.9 billion. In 2015, Japan Post Holdings Co (T:6178) bought Australian logistics company Toll Holdings for A$6.5 billion.

($1 = 1.5911 New Zealand dollars)

($1 = 1.4728 Australian dollars)

($1 = 107.7000 yen)

 

Shinsei to buy New Zealand's UDC Finance for $480 million, its biggest overseas deal
 

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