MyState-Auswide Merger Advances with Federal Treasurer’s Nod, Completion Set for February

Federal Approval Marks Major Milestone

MyState Limited (ASX: MYS) announced on 24 January 2025 that it has received the Federal Treasurer's approval for its proposed merger with Auswide Bank Limited (ASX: ABA). This regulatory green light under the Financial Sector (Shareholdings) Act 1998 represents a critical step forward in the companies’ strategy to combine forces and expand their footprint in the regional banking sector.

MyState’s Managing Director and CEO Brett Morgan described the approval as a "significant milestone" that aligns with the growth ambitions of both organisations. The merger is positioned to create a more robust regional bank, leveraging the complementary strengths of MyState and Auswide to achieve operational scale and enhanced competitive positioning.

Leadership and Integration Plans

Under the terms of the proposed merger, Brett Morgan will continue as CEO of the merged entity, while Auswide’s Chair Sandra Birkensleigh will take on the role of Board Chair. This leadership structure aims to blend continuity with fresh governance oversight, potentially smoothing the integration process.

Mr Morgan emphasized that integration plans are well advanced, with confidence expressed in delivering substantial benefits to both customers and shareholders. The combined group is expected to harness scale advantages, which could translate into improved product offerings, enhanced service capabilities, and cost efficiencies.

Next Steps and Conditions

Despite the Federal Treasurer’s approval, the merger remains contingent on two key conditions: approval by Auswide shareholders at a Scheme Meeting scheduled for 3 February 2025, and subsequent approval by the Supreme Court of New South Wales at a hearing on 7 February 2025. Subject to these approvals, the merger is anticipated to complete on 19 February 2025.

These upcoming milestones will be closely watched by investors and analysts, as they represent the final regulatory and shareholder hurdles before the merger can be fully realised. The court’s endorsement will be particularly pivotal, ensuring that the scheme of arrangement meets legal standards and protects stakeholder interests.

Strategic Implications for Regional Banking

The merger reflects broader consolidation trends within Australia’s regional banking sector, where scale and diversification are increasingly critical to compete with larger national banks. By combining, MyState and Auswide aim to strengthen their market presence and financial resilience, potentially positioning themselves as a more formidable player in the regional banking landscape.

For shareholders, the deal promises value creation through synergies and expanded capabilities, while customers may benefit from a broader product suite and improved service delivery. However, integration risks and execution challenges remain, as with any merger of this scale.