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Westpac-St George agreement stirs NAB

Westpac-St George agreement stirs NAB

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Date Published : Wednesday, May 14, 2008

A bidding war among Australia's major banks has broken out for the Sydney-based institution St George.

On Tuesday (May 13th), it had been announced that Westpac - the country's third-largest bank - had agreed a merger with St George which would create the nation's biggest financial service group worth around $66 billion.

St George had said it had agreed to an $18.6 billion offer from Westpac.

Westpac chairman Ted Evans said: "The Westpac board felt the timing was right to approach St George with a proposal harnessing the strength of both organisations to create Australia's leading financial services company.

"The transaction we have now agreed is a true merger."

According to AFP, the two banks said that they had signed an agreement for a two week exclusivity period, during which time they would undertake due diligence and negotiate the detailed terms of a merger and its implications on staffing.

The combined group would have a 25 per cent share of the home loan and personal loan market.

However, since that deal was announced, National Australia Bank (NAB) had said that it has not ruled out making a counter bid for St George after the two week period is up.

Speaking on ABC Television, NAB chief executive John Stewart stated that the bank would watch events "with interest".

"There's nothing we can do during the two weeks apart from speculate. We'll watch closely."

NAB - as well as ANZ - had previously held a stake in St George before selling it earlier this decade.

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