St George Bank has agreed to an all-scrip merger proposal from Westpac Bank to create Australia's largest bank by value.
Westpac will offer St George shareholders a premium of 28.5 per cent of St George closing price on May 9, valuing the company at $33.10 a share.
"[The merger] would create Australia's leading financial institution with regard to meeting customer needs, distribution, strong brands, scale, financial strength and the best products," Westpac chief executive Gail Kelly said in a statement to the Australian Securities Exchange (ASX) this morning.
"It would also provide greater diversity and choice of products from both organisations.
"This would ensure that the best of each bank's product and service capabilities can be extended across customer segments, driving significant revenue growth."
Westpac first proposed an all-scrip merger with St George on May 12 to create Australia's largest bank by market value and the third biggest dealer group by adviser and practice numbers.
If both companies were to merge, they may have a market value exceeding $66 billion, on par with British giant Barclays and surpassing the $60.8 billion capitalisation of Commonwealth Bank of Australia.
Both companies would have a wealth management platform with $108 billion in funds under administration, a Westpac statement to the ASX said.
Westpac and St George together have 1124 financial planners with 648 practices, according to data from the latest IFA Dealer Group Survey.
That would create an integrated dealer group sitting below Professional Investment Services, Australia's biggest dealer with 1540 advisers, and AMP Financial Planning, the second largest with 1295 advisers.
Westpac is the owner of Magnitude Financial Planning and BT Financial Group, a provider of personal and business insurance products, superannuation funds and the owner of BT Wrap and BT SuperWrap.
St George is the owner of Securitor, the country's 11th biggest dealer group by adviser numbers and Asgard Wealth Solutions, the owner of AdviserNetgain and eWrap.
