The Australian lender will hold a 45% stake in the merged company besides getting a deferred consideration and pre-completion dividend
Commonwealth Bank of Australia (CBA) has agreed to merge Aussie Home Loans with online home loan platform Lendi, in a move to create one of the largest providers of home loans in Australia.
As per the terms of the deal, CBA will have a 45% stake in the merged business, while Lendi’s existing shareholders will hold the remaining stake of 55%.
CBA will also be eligible for a deferred consideration and a pre-completion dividend, totalling AUD105m ($79.3m). The Australian lender will continue to offer funding for the Aussie Select branded home loan product.
CBA CEO Matt Comyn stated: “We believe the combined business will have a stronger platform to offer enhanced digital capabilities for Aussie brokers and a superior experience for customers.”
According to Lendi, the transaction will combine its digital technology with the significant network of Aussie Home Loans, which consists of more than 970 brokers and over 210 stores.
The merged home loan provider, which will maintain a multi-brand strategy, It is expected to offer an increased choice of home loan lenders and products to Australians. Besides, home loan customers will have more ways of engaging with their mortgage broker to obtain the product appropriate for their individual requirements.
Aussie Home Loans’ network of brokers and franchises will get to use Lendi’s technology and platform, which includes the scope to integrate with lender credit-decisioning engines and also regulatory and compliance tools.
Lendi CEO and co-founder David Hyman said: “This is an exceptional opportunity to drive the growth and digitisation of two companies that have led disruptive change for the benefit of customers in the Australian home loan market.
“Lendi was born digital. Our technology, platform and people have revolutionised not only how Australians access home loans but also market transparency.
“The role of digital technology in strengthening customer outcomes, compliance and operational agility is only growing in importance; and by coming together with a robust and trusted business like Aussie, we will be able to drive even stronger outcomes for more homeowners and brokers alike.”
Lendi revealed that ANZ’s subsidiary ANZi, which is one of its long-term partners and shareholders, is supporting the transaction. ANZi is also expected to invest an additional capital in the merged company.
The deal, which is subject to approval from the Australian Competition and Consumer Commission (ACCC) and other customary conditions, is expected to close by mid-2021.