Commonwealth Bank (ASX:CBA)
has sold a 55 per cent stake in Colonial First State (CFS) to global investment firm KKR.
CFS provides superannuation, investment and retirement products to individuals and corporate investors. The transaction implies a total valuation for CFS of $3.3 billion, which will result in CBA receiving around $1.7 billion from KKR. Meanwhile, the remaining 45 per cent of CFS will still be owned by CBA.
CBA notes they are committed to working with KKR 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 leading standalone business and superannuation fund investors.
“The sale completion represents an important milestone in CBA’s strategy to focus on its core banking businesses and to create a simpler and better bank," said CEO Matt Comyn.
"With our partner KKR, we will support CFS in becoming one of the leading superannuation and investment businesses in Australia, offering members greater choice and better value."
The transaction is expected to deliver an increase of around $1.47 billion of common equity tier 1(CET1) capital, resulting in a pro forma uplift to the group’s CET1 ratio of 32 basis points on an APRA basis, based on the group’s risk weighted assets as at 30 September 2021, the bank said.
Shares in Commonwealth Bank (ASX:CBA)
are trading 0.2 per cent higher at $93.36.