Japan’s Sumitomo Group to buy 74.9 PC stake in Fullerton India Credit for USD 2 bn

Japan’s Sumitomo Mitsui Financial Group (SMFG) on Tuesday announced that it would acquire 74.9 per cent stake in Fullerton India Credit Company Limited, one of India’s largest non-bank lenders. The deal value reportedly pegged at USD 2 billion, is part of the Japanese bank’s effort to expand across Asia. The conglomerate has already invested in several financial institutions in Vietnam and the Philippines this year.

The transaction, however, is contingent upon regulatory approvals. The banking behemoth has plans to eventually acquire 100 per cent stake in FICC, which is a wholly-owned subsidiary of Fullerton Financial Holdings (FFH). The $2 billion payout is for the first leg of the two-legged deal. In the second leg, the another USD 500 million-plus for the remaining stake to take the ownership 100 per cent. At the current exchange rate, the deal value will be about Rs 18,550 crore. FFH is a wholly-owned independent portfolio company of Singapore-headquartered investment company, Temasek.

In a joint press statement, he Japanese giant and the Singaporean owners said “Sumitomo Mitsui Financial Group Inc today entered into an agreement with Fullerton Financial Holdings Pte Ltd to acquire 74.9 per cent stake in Fullerton India Credit Company from the latter, subject to regulatory approvals. Sumitomo will eventually acquire 100 per cent of Fullerton Credit,” . Sumitomo said the deal will help it participate in India”s long-term growth story on one hand and help it strengthen its digital reach across Asia.

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Established in 1994, Fullerton is one of India’s largest nonbank lenders. Its core business is personal lending, with outstanding loans in fiscal 2021 reaching 250.5 billion rupees ($3.3 billion). It employs 14,000 and has 650 branches across the country.