CBA Announces Agreement to Sell 55% Stake in Colonial First State to KKR
The transaction implies a total valuation for CFS on a 100% basis of
The transaction is consistent with CBA’s strategy to focus on its core banking businesses and to create a simpler and better bank, while allowing CFS to become a more focussed standalone business and deliver a wide range of benefits for members.
Together, CBA and KKR intend to undertake a significant investment program, strengthening the position of CFS as one of Australia’s leading retail superannuation and investments businesses.
The proposed investment program for CFS is intended to deliver a range of substantial benefits over time for its member base of over one million Australians, including:
- a simplified product offering, with competitive pricing and choice for members;
- an improved service experience across multiple channels, including accelerated investment in digital channels;
- modernised technology systems to deliver a market leading superannuation service to members; and
- better access to member education, support and self-service tools, to help Australians navigate the complexities of the superannuation and pension system.
In addition, the transaction is expected to enhance the tools provided and the ease of doing business with CFS for financial advisors.
CBA Chief Executive Officer,
CFS Chief Operating Officer,
Partner and Head of
Partner and KKR Australia’s Head of Private Equity,
KKR expects to make its investment in CFS primarily from its Asian private equity fund.
CBA financial impacts
The sale price is estimated to result in a post-tax gain on sale of approximately
The transaction represents the final stage of CBA's previously announced planned exits from various wealth management activities over recent years. The estimated financial impacts of the transaction are subject to the final outcomes relating to the capital structure of CFS at completion, accounting adjustments, taxation impacts and separation costs.
CBA remains committed to delivering on the undertakings it made following the
Upon completion, CBA will indemnify CFS for certain pre-completion conduct, including liabilities relating to remediation activities, regulatory actions and third-party claims.
Timing and conditions
Completion of the transaction is subject to
CBA’s medium-term intentions
CBA is committed to working with KKR in the medium-term to achieve a range of objectives that will create value for all stakeholders through the successful separation of CFS from CBA and the creation of a standalone business. CBA intends to maintain its shareholding in CFS throughout this period and will further assess its longer-term intentions thereafter.
Established in 1988, CFS is a provider of superannuation, investment and retirement products to individuals and corporate and superannuation fund investors, as well as being the operator and administrator of investment platforms. As at
KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR aims to generate attractive investment returns for its fund investors by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation with KKR portfolio companies. KKR invests its own capital alongside the capital it manages for fund investors and provides financing solutions and investment opportunities through its capital markets business. References to KKR's investments may include the activities of its sponsored funds. For additional information about
The release of this announcement was authorised by the Continuous Disclosure Committee
1 Includes an estimated pro forma surplus capital of
2 On a 100% basis (excluding surplus capital).
3 Based on CFS’s underlying run rate cash earnings as at
4 The CET1 capital benefits principally comprise the post-tax gain on sale plus a reduction in CET1 capital reductions from accounting goodwill and investment in net tangible assets. The estimated CET1 capital benefit assumes CFS is deconsolidated from an accounting perspective and a full CET1 deduction is applied for the remaining 45% interest in CFS.