By Kim Jae-won
The union of the Korea Exchange Bank (KEB) held a secret meeting with executives of Australia and New Zealand Banking Group (ANZ) last month, smoothing the way for a successful bid by Australia’s fourth financial services provider for a controlling stake in KEB, currently held by Lone Star private equity fund.
The meeting was made public through reports Monday, and sources said that as a result of their secret dialogue the KEB union dropped its plan to thwart due diligence by ANZ.
“The union didn’t have sufficient information on ANZ’s bid but we had a cordial meeting that clearly removed any uncertainty about the Australian bank’s bid so we subsequently decided on our plan,” a source told The Korea Times.
On hand at the meeting were senior ANZ officials and KEB union leader Kim Kwi-chul, the source said. The source’s remarks were also confirmed by another source.
It is not independently confirmed whether ANZ fully addressed the union’s key concerns but it is safely speculated that the union became assured that it would be fully consulted in the process.
In an interview with The Korea Times two weeks ago, KEB union chairman Kim said he would back ANZ if the lender promised not to lay off employees and to keep KEB’s name and identity.
The KEB union assumes an important voice in any merger plan by a foreign bank. The union objected to a bid by Kookmin Bank because of its fears of large layoffs following a big-scale rationalization. It didn’t raise objections over the HSBC bid, after the U.K-based international banking heavyweight agreed to not lay off employees in 2008.
The government regulators did not approve Kookmin’s bid saying Lone Star’s legal dispute was still pending, while HSBC withdrew from the deal following the onslaught of the global financial crisis.
Meanwhile, ANZ CEO Mike Smith will visit Korea Saturday to join Korea-Australia Business Dialogue, hosted by the finance ministries of both nations, which will be held on Sunday at the Lotte Hotel in Seoul.