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October 8, 2008

HBOS sells Australian businesses to Commonwealth Bank

by Richard Kilner

Story link: HBOS sells Australian businesses to Commonwealth Bank

The Commonwealth Bank of Australia has executed a sale and purchase agreement with British bank HBOS to acquire Bank of Western Australia Limited (BankWest) and St Andrew’s Australia Pty Ltd (St Andrew’s).

The deal does not involve the other Australian operations of HBOS, which include Capital Finance Australia Ltd, BOS International (Australia) Ltd and HBOS’s Australian Treasury operations.

The green light is required from the relevant government, competition and regulatory bodies, and the purchase price is set at $2.1bn.

Given the present dramatic turbulence in the financial markets, the Commonwealth has resolved to retain a hefty surplus of capital, and ratings agencies Standard & Poor’s, Moodys and Fitch have all given assurances that the firm’s credit rating will point to a stable outlook after the acquisition is completed.

CEO of Commonwealth Bank Ralph Norris has stated that it is rare for such an attractive proposition to become available on such good terms.

Norris went on to explain that the firm enjoyed a strong capital position, and that the deal was a good strategic choice for the bank.

 

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