SYDNEY/TOKYO – Shinsei Bank Ltd. said it will buy New Zealand’s top nonbank finance provider, UDC Finance Ltd., for $480 million (¥51.7 billion) 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. 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 762 million New Zealand dollar price tag is higher than the NZ$660 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 ($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 aging population at home.
Last year, Mitsubishi UFJ Financial Group bought an asset management business from Australia’s biggest lender, Commonwealth Bank of Australia, for $2.9 billion. In 2015, Japan Post Holdings Co. bought Australian logistics company Toll Holdings for 6.5 billion Australian dollars.