Japan’s Sumitomo Mitsui Financial Group (SMFG) has filed a proposal with the Competition Commission of India (CCI) to acquire Fullerton India Credit Company (FICC).
SMFG will buy NBFC in two steps by acquiring a 74.9% stake from Fullerton India Credit Company and a 25.1% stake from Angelica investments.
Sumitomo will pay $2 billion for a 74.9% stake as the Japanese bank intends to expand its business in Asia, this marks the first entry into South Asian country by the bank.
FICC is wholly owned by Singapore’s state investment fund Temasek Holdings.
The shadow lender offers loans to small businesses and individuals,
The acquisition marks a step towards fully divesting Fullerton India Credit Company.
FICC began its operations in 2007 under FFH, which is a wholly-owned subsidiary of Singapore’s Temasek
VCCircle exclusively reported that Fullerton had received interest from private equity firms to but the housing finance arm in November last year.
Company in 2016 had launched its housing finance company which it operates under the Grihashakti brand. The housing finance company will continue to be its wholly-owned subsidiary.
The NBFC operates in several verticals like business, housing finance, and personal loans. It has over 14,000 employees with 3.6 million customers across the country.
The acquisition marks Sumitomo’s new strategy of allocating resources in emerging markets. The company previously acquired a minority stake in Indonesian lender PT Bank Tabungan Pensiunan Nasional in 2019
SMFG has previously agreed to acquire a 49% stake Vietnamese lender FE credit.
Sumitomo is a financial services company, they offer Services like commercial banking, leasing, securities, and consumer finance in Japan. SMFG is the second biggest bank in terms of assets and market capitalization. It is often referred to as a megabank with Mitsubishi Financial Group and Mizuho Financial Group.