By Makiko Yamazaki and Archishma Iyer
(Reuters) -Mitsubishi UFJ Financial Group will buy Australian pension administration firm Link Administration in a A$1.2 billion ($802.7 million) deal, as Japan’s largest banking group boosts its fund administrator business.
It represents Mitsubishi UFJ’s seventh acquisition in the fund administration industry in the decade, with past deals including UBS Asset Management’s alternative fund services business in 2015.
Link said its shareholders will receive A$2.10 in cash, or A$1.11 billion in total, in addition to a dividend of A$0.16 per share to be paid by the company, implying an enterprise value of A$2.1 billion.
The purchase price marks a 23.5% premium to Friday’s closing price.
Mitsubishi UFJ, which had a 6.4% stake in the share registry firm as of Nov. 27, said in a statement the acquisition “will enable MUFG to further accelerate its global business expansion via access to Australian funds and global corporate clients.”
An executive at the Japanese banking group told a media briefing that Link will help the group expand in new markets such as Canada and the Netherlands, and boost the efficiency of its fund administration business by consolidating some operations.
The share purchase, which is expected to take place from June 2024 onwards, is subject to shareholder approvals as well as court and regulatory authorities.
The Link board said it recommends that its shareholders vote in favour of the scheme in the absence of a superior proposal.
Link is the largest Australian pension administration company, providing services to 10 million accounts, or approximately 41% of Australian private pension members.
It also provides the share registry business in Australia, Britain and India. The Mitsubishi UFJ executive said the group plans to maintain its partnership in shareholder identification services with Georgeson, a unit of share registry service giant Computershare.
($1 = 1.4950 Australian dollars)
(Reporting by Archishma Iyer in Bengaluru and Makiko Yamazaki in Tokyo; Editing by Sandra Maler and Stephen Coates)