St George-Westpac merger given go ahead

(AAP) St George Bank Ltd shareholders on Thursday overwhelmingly approved Westpac Banking Corp's $16 billion-plus merger proposal.

A combined St George and Westpac will become the nation's second biggest bank, just
a whisker behind Commonwealth Bank of Australia in terms of market capitalisation.
Westpac and St George will have a combined market value of $45.8 billion, calculated
at Thursday's closing price, just a touch behind Commonwealth's market
capitalisation of $46 billion.
The merger, the biggest yet in Australian banking history, will be implemented on
December 1 and leave St George shareholders owning 30 per cent of the combined bank.
Three St George directors will join the combined board including St George chairman
John Curtis who will become deputy chairman of the expanded bank.
St George said 94.55 per cent of votes cast at Thursday's extraordinary general
meeting of shareholders in Sydney were in favour of the merger proposal, in a deal
that required a 75 per cent majority of votes.
Mr Curtis said the vote was an historic event.
"[The vote] brings together two great businesses to create the leading financial
services organisation and one of the largest companies in Australia.
"In addition, the new entity will be one of only 17 banks in the world which are
rated AA or higher."
He said St George shareholders voted in favour of the merger for a number of reasons.
"Creating a bigger, stronger bank between two very well run banks, in this climate
today made a lot of sense," Mr Curtis said.
"Secondly, the business model, which Westpac proposed to us - it was a model that
was all about retaining the St George culture, retaining the brands, the branches,
the ATM network - that was something that we found very compelling."
"And then the premium for St George shareholders - 1.31 Westpac shares was 28.5 per
cent above the spot price at the time."
However, the Finance Sector Union has estimated that as many as 5,000 jobs could be
at risk due to the merger.
Mr Curtis told journalists that the FSU number was pure speculation although in his
presentation earlier to shareholders he warned there may be job losses.
"Yes, unfortunately there may well be some job losses, mainly in the back office and
head office functions, which are inevitable with any merger," Mr Curtis said.
"But Westpac have given a commitment to minimise job losses through natural
attrition and redeployment wherever possible."
Mr Curtis said "there will be some inevitable short-term pain" but that the
acceptance of the Westpac proposal would create a stronger and better bank for
customers, staff and shareholders.
Westpac chairman Ted Evans said the strong vote in favour of the merger demonstrated
that St George shareholders appreciated the benefits the merger would create.
"The merger creates a larger, more diverse and even stronger financial services
company - well positioned to meet the challenges of the current global environment."
Westpac offer included 1.31 of its shares for every St George share and a special
dividend payment.
St George closed down $2.50 to $24.00 and Westpac fell $2.13 to $16.97 in a weaker
overall market.