St George & Westpac Acquisition: Economic Rationale, Analysis, and Performance

qwertyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmqwertyuio
pasdfghjklzxcvbnmqwertyuiopa
sdfghjklzxcvbnmqwertyuiopasd
fghjklzxcvbnmqwertyuiopasdfg
hjklzxcvbnmqwertyuiopasdfghj
klzxcvbnmqwertyuiopasdfghjklz
xcvbnmqwertyuiopasdfghjklzxc
vbnmqwertyuiopasdfghjklzxcvb
nmqwertyuiopasdfghjklzxcvbn
mqwertyuiopasdfghjklzxcvbnm
qwertyuiopasdfghjklzxcvbnmqw
ertyuiopasdfghjklzxcvbnmqwert
yuiopasdfghjklzxcvbnmqwertyu
iopasdfghjklzxcvbnmrtyuiopasd
fghjklzxcvbnmqwertyuiopasdfg
Corporate accounting

St George & Westpac Acquisition
Executive summary
The case of St George & Westpac assists in highlighting the international corporate
strategies together with the business models that facilitates in stagnant growth. The main
reason of the acquisition lies in the fact that Westpac believed that the respective brands
would be more capable in competing and flourishing by belonging to the same stronger and
larger organization. Besides, the CSR measures adopted by the company ensure that there is a
friendly and fair environment for the society at large. In the previous years, the company’s
growth strategies in the form of technological measures, innovative products, etc allowed to
expand throughout the world. This means that both the organization were potent in their
approach and had a strong market capture that lead to powerful business. From the
acquisition it became crystal clear that the major objective is to strengthen the market further
and deliver a huge range of services to the customer and stakeholders.
2

St George & Westpac Acquisition
Contents
Introduction...........................................................................................................................................3
Economic rationale behind the acquisition...........................................................................................4
Personal incentives to accept the offer.................................................................................................5
Acquisition method and analysis...........................................................................................................6
Post-acquisition accounting performance.............................................................................................8
Whether the deal was value enhancing for shareholders...................................................................11
Conclusion...........................................................................................................................................14
References...........................................................................................................................................15
3

St George & Westpac Acquisition
Introduction
In April 1817, Westpac began its trading as the primary bank of New South Wales. However,
in 1982, it got merged with the Commercial Bank of Australia and became Westpac Banking
Corporation. It has affiliates and branches throughout New Zealand and Australia,
contributed by mergers throughout prior years and the Pacific area, and significant financial
centres around the globe including Hongkong, Singapore, London, and New York. The bank
employs more than 29000 people around the world and pursues more than $402 billion assets
that allows it to create a huge base of customers. On the other hand, St George was a housing
based financial institution that was founded in 1937 and eventually it became the fifth largest
bank of Australia. It has business spanning of all segments of the financial industry that
includes institutional, retail banking, wealth management, and business banking. In business
culture, this bank focuses primarily on customer services (Alexandridis & Travlos, 2010). In
2008, Westpac acquired St George and both merged as a $66 billion group that became the
biggest home lending provider with a market share of twenty five percent and biggest wealth
platform provider having resources under administration of $108 billion. Overall, this merger
created Australia’s leading financial services company for the shareholders, customers, and
employees with an AA credit rating complimented by better fund accessibility and bigger
balance sheet (Alshwer et. al, 2011).
4