Japan-headquartered Mitsui Sumitomo Financial Group (SMFG) will acquire Fullerton India, an overseas arm of Singapore-based Fullerton Financial. The deal is valued at around US$2.6 billion (SG$3.5 billion).
Fullerton India, which was established in 2007, offers various loans and is also an insurance intermediary for life, general, group and health insurance. It has 14,000 employees and over 3.6 million customers, with 648 branches across India.
According to a report by Times of India, this acquisition is the largest one by a Japanese financial firm in the Indian market, and is also the first time a Japanese company is entering the Indian retail lending space.
Mitsui Sumitomo will initially acquire 74.9% of Fullerton India, with the remaining 25.1% to follow at a later date.
“India is one of our focus markets where we believe in its high growth potential and want to build a deeper presence,” Jun Ohta, president & group CEO of SMFG, said in a statement.
SMFG also holds a minor stake in Max Life Insurance, while Japanese companies are among the top investors in India. Since 2000, Japanese firms have invested US$35.4 million in the Indian economy. Major names include automakers Suzuki, Toyota and Honda, as well as electronics maker Sony.
Citigroup, Cyril Amarchand Mangaldas and Allen & Overy acted as financial and legal advisers for Fullerton, while J.P. Morgan and Anderson Mori & Tomotsune advised SMFG.
