Japan based Sumitomo Mitsui Financial Group Inc has announced the completion of a 71% stake acquisition in Fullerton India Credit Company Limited (Fullerton India) from Fullerton Financial Holdings Pte Ltd (FFH).
With this post-completion of the purchase, Fullerton India has become a consolidated subsidiary of SMFG.
SMFG will eventually purchase 100% of Fullerton India over some time.
The transaction marks the largest M&A of a private company in Indian financial services in the last 2 years and the largest ever inbound control acquisition by a Japanese enterprise entering the Indian market.
The acquisition gives SMFG access to a pan-India footprint across 25 states, 600 towns, and 58,000+ villages through 698 branches.
“It reinforces SMFG’s push into Asian consumer and MSME lending, and reaffirms the strength of Fullerton India’s platform underpinned by best-in-class corporate governance, risk management, prudent liquidity management, agile technology, and advanced analytics,” the company said.
“As part of the transaction, Fullerton India’s Board will be reconstituted to comprise Nobuyuki Kawabata, Rajeev Veeravalli Kannan, Hong Ping Yeo, Anindo Mukherjee, Shantanu Mitra, Shirish Moreshwar Apte, Dr. Milan Robert Shuster, and Sudha Pillai,” the statement added.
Fullerton India’s management team will continue to operate under the leadership of Mitra, Managing Director, and CEO of Fullerton India.
Commenting on the acquisition, Jun Ohta, President & Group CEO of SMFG said, “We are delighted to welcome Fullerton India as a member of SMFG and our business partner in India. The foundation of a country’s development is not just the growth of its corporates but also that of its citizens – Fullerton India will play an important role to promote inclusive growth in line with our long-term strategy for India.”
“We are excited to work with the Fullerton India management team led by Mr. Shantanu Mitra and are confident that we will be able to unlock the potential of the Fullerton India platform and drive significant value creation through synergies between SMFG and Fullerton India. SMFG is committed to supporting the growth plan of Fullerton India by leveraging our customer network and through funding support,” Ohta added.
Speaking on the development, Hong Ping Yeo, CEO of FFH said, “FFH is a leading Asian operator investor in financial services promoting financial inclusion for mass-market consumers and MSMEs. We are delighted to partner with SMFG who is as committed to delivering differentiated financial products and services, empowering customers, and creating broader stakeholder impact as we are.”
“We believe that SMFG’s experience in building high-quality franchises and digital platforms in emerging markets is valuable to the next leg of Fullerton India’s journey. At the same time, FFH will partner with SMFG as a significant minority shareholder and work with SMFG to ensure a smooth and successful transition,” Yeo added.
Commenting on the development, Shantanu Mitra, Managing Director and CEO of Fullerton India said “With the rapid deployment of vaccines and steady decline in COVID infection rates, we are witnessing a strong revival of economic activity in India. There is a steady pick-up in credit demand and healthy loan growth. In addition, portfolio quality is also demonstrating encouraging signs of improvement.”
“With the support of two reputed multinational houses as shareholders, Fullerton India is well-positioned to further strengthen the franchise and capitalize on the growth in the Indian market,” Mitra added.