Japanese group snaps up UDC Finance
ANZ has sold its asset finance and car loan specialist UDC to a Japanese-based financial services group for $762 million.
The purchase by Shinsei Bank follows a strategic review of UDC as ANZ seeks to simplify its business.
ANZ said the purchase price was 1.2 times UDC Finance’s current net tangible assets of $637m.
The sale will release more than $2 billion of funding provided by ANZ and further strengthen its balance sheet position, the bank says. It will make a net gain on the sale of $63m, but a net loss of $73m after the release of goodwill, reports NBR.
The deal is subject to regulatory approval but it is expected to be completed in the second half of this year.
ANZ NZ chief executive officer Antonia Watson says the purchase by Shinsei Bank was a vote of confidence in the New Zealand economy.
“With a strong outlook for infrastructure and agriculture projects as the New Zealand economy rebuilds post-Covid-19, there is a significant role for UDC to play,” she adds. “As such, it needs an owner that can invest in and grow the business.”
An agreement to sell UDC Finance to Chinese conglomerate HNA Group for $660m fell over in January 2018 after the Overseas Investment Office rejected the deal.
Shinsei Bank Group is a diversified financial group with banking and non-banking business divisions. It runs asset financing and vehicle and consumer lending businesses similar to those of UDC within Japan and offshore.
“Shinsei Bank intends to preserve UDC’s operations, retain UDC employees and provide long-term capital to maintain and grow customer lending in New Zealand,” Watson says.
“The sale will also mean UDC will continue to operate as an independent finance company and enhance competition in the asset finance market.”
Hideyuki Kudo, chief executive of Shinsei Bank, says the purchase of UDC is “in line with our non-organic growth strategy in this business area”.
“In the Covid-19 ‘new normal’, we are confident that UDC, as part of Shinsei Bank Group, will continue to grow and contribute to the development of the New Zealand economy and help people and businesses in New Zealand with their financial needs,” he adds.
“Based on UDC’s long successful history, solid business base and efficient sales structure, UDC will be a major asset for the Shinsei Bank Group.”.
UDC made a net profit of $24.5m in the six months to March 31. This follows an annual net profit of $69.7m in 2019, up from $65.3 the previous year.
