ANZ In Talks for Cerberus’ Stake in Aozora Bank

Australia and New Zealand Banking Group is in talks to buy a 50% stake in Japan’s Aozora Bank, Reuters reported. The stake, currently owned by buyout shop Cerberus Capital, is valued at about $4.2 billion. Aozora has 20 branches and overseas representative branches with total assets of 4.85 trillion yen ($63 billion), Reuters wrote.

(Reuters) – Australia and New Zealand Banking Group is in early stage talks to buy Cerberus Capital’s 50 percent stake in Japan’s Aozora Bank which has a market value of $4.2 billion, two sources familiar with the deal said on Tuesday.

ANZ, they said, is eyeing Aozora for its deposit base and also to use it as a springboard to tap trade flows in Japan, which is Australia’s second-largest trading partner after China.

The lack of right-priced deals in developing Asia where the asking price for bank deals can go as high as four times book is pushing ANZ to look at mid-sized assets in markets such as Korea and Japan, one source said.

“The talks are at an embryonic stage,” the other source said, adding the deal should satisfy all the main parameters such as pricing and potential for return on investments. The two sources clarified ANZ was in talks to buy private equity firm Cerberus’s stake and not the entire bank.

The sources declined to be named as they are not authorised to speak to the media.

ASIAN STRATEGY

Aozora has 20 branches and 2 overseas representative branches with total assets of 4.85 trillion yen ($63 billion), according to its website.

Aozora focuses on lending to corporates rather than home loans, fitting in with ANZ’s Asian strategy to leverage links with corporates in the region to grow business, one source said.

An ANZ spokesman declined comment on any deal but said the bank was always looking at opportunities to advance its Asian strategy, which calls for its Asian businesses to account for up to 30 percent of group profit by 2017.

An Aozora spokesman said he could not comment on speculation.

On Monday the Australian Financial Review said ANZ was looking at buying either Japan’s Tokyo Star Bank or Aozora Bank.

Aozora shares have risen 14 percent over the past two days on expectations of an ANZ bid.

ANZ is looking at Asia for growth and has invested nearly $6 billion in capital in the region to grow its institutional, trading desks and wealth advisory arm.

It bought some Asian assets of RBS in 2009 for $550 million but its recent efforts to buy in Asia have been stymied. It lost out on a bid to gain control of Korea Exchange Bank for nearly $4 billion last year.

ANZ shares ended 0.15 percent lower at A$20.18 on Tuesday.($1 = 76.985 Japanese Yen) (By Narayanan Somasundaram; Additional reporting by Taiga Uranaka; in Tokyo; Editing by Mark Bendeich and Muralikumar Anantharaman)