Japan’s Sumitomo Mitsui Financial Group (SMFG), the holding company of one of the largest global banking and financial service groups, is set to acquire 74.9 per cent stake in Fullerton India Credit Company Limited (FICC), a non-banking finance company that offers credit to retail as well as small businesses. Reports have pegged the deal value at $2 billion.
The transaction is contingent upon regulatory approvals. SMFG has plans to eventually acquire 100 per cent stake in FICC, which is a wholly-owned subsidiary of Fullerton Financial Holdings (FFH). FFH, in turn, is a wholly-owned independent portfolio company of Singapore-headquartered investment company, Temasek.
This acquisition by SMFG marks its big Asian push towards consumer and MSME lending.
“We intend to leverage our expertise in Japan market as well as capabilities of our franchises across key emerging Asian markets”, said Jun Ohta, President & Group CEO of SMFG. “India is one of our focus markets where we believe in its high growth potential and want to build a deeper presence”, he added.
Fullerton India Home Finance, the housing finance arm of FICC, will continue to remain a wholly-owned subsidiary of FICC post the fructification of the transaction.
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.
Hong Ping Yeo, CEO, FFH said, “We believe that SMFG’s experience in building high quality franchises and digital platforms in emerging markets aligns with our vision for FICC”.
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