Japan’s Sumitomo Mitsui Financial Group (SMFG) and Fullerton Financial Holdings (FFH) July 6 reached an agreement for the previous to accumulate the latter’s 74.9% stake in its diversified NBFC arm Fullerton India Credit Company.
The deal is subject to regulatory approvals and consistent with sources has been struck for around $2 billion.
SMFG will eventually acquire 100% of Fullerton India Credit Company (FICC).
FFH may be a wholly-owned independent portfolio company of Singapore-headquartered investment trust , Temasek.
This investment brings together SMFG’s Asian push towards consumer and MSME lending, with FICC’s expertise in serving mass-market consumers and MSME customers in India. The transaction reaffirms the strength of FICC’s platform underpinned by best-in-class corporate governance, risk management, prudent liquidity management, agile technology, and advanced analytics. SMFG and FFH will work together on subsequent leg of FICC’s growth.
“SMFG is one among the most important financial service groups in Japan offering a various range of monetary services. We shall leverage our expertise in Japan market also as capabilities of our franchises across key emerging Asian markets. We are pleased to partner with FFH and jointly accelerate FICC’s growth strategy,” said Jun Ohta, President & Group CEO of SMFG.
Ohta added, “India is one among our focus markets where we believe its high growth potential and need to create a deeper presence. As a long-term investor, we believe that the FICC platform’s innate strengths of multi-product focus, pan-India distribution, and powerful management will enable us to create a comprehensive financial service offering in India.”
“FFH’s mission since inception is to be the catalyst in enriching lives and enabling success of consumers and communities served by our portfolio companies across Asia. we’ve developed FICC into a differentiated financial services franchise driving impact for the growing mass market consumers and enterprises through a pan-India presence and a scalable digital platform. We are delighted to partner SMFG who shares our conviction within the potential of India,” said Hong Ping Yeo, CEO of FFH.
“We believe that SMFG’s experience in building top quality franchises and digital platforms in emerging markets aligns with our vision for FICC,” Yeo added.
“Over the years, we’ve built a robust franchise with high governance standards and remained resolute in our financial inclusion journey, serving customers within the country’s hinterlands, through our extensive distribution network,” said Shantanu Mitra, director and CEO of FICC.
Mitra added, “With SMFG’s strong endorsement of our capabilities and potential to proportion further, we are sure we’ll further strengthen the franchise and make future value for all our stakeholders.”
Citigroup, Cyril Amarchand Mangaldas, Allen & Overy were financial and legal advisors to FFH whereas J.P. Morgan, Anderson Mori & Tomotsune were financial and legal advisors to SMFG
Know The Acquirer
Sumitomo Mitsui Financial Group, Inc. (“SMFG”) is that the company of 1 of the most important global banking and financial service groups, offering a various range of monetary services, including commercial banking, leasing, securities and consumer finance with a heritage exceeding 400 years in Japan. SMFG is listed on the Tokyo and ny (via ADR) Stock Exchanges and features a market capitalisation of roughly $47.4 billion (as of 30 June 2021).
Know The Target
Fullerton India Credit Company (“FICC”) may be a diversified NBFC registered in India and a wholly-owned subsidiary of FFH. FICC started its India operations in 2007 and has established a pan India presence – across 600 towns and 58,000+ villages through 629 branches and 13,000+ employees offering lending products to 2.3 million bankable yet underserved retail and little business borrowers.
