The Commonwealth Bank of Australia (ASX: CBA) share price could be on the move today after a late announcement on Thursday.
What did CBA announce?
Long after the market closed on Thursday, Australia's largest bank provided an update on the divestment of its Colonial First State Global Asset Management (CFSGAM) business.
CFSGAM is a global asset manager with over A$204.2 billion invested across equities, fixed income, infrastructure, and multi-asset solutions on behalf of institutional and wholesale investors. Its brands include Colonial First State, First State Stewart Asia, Stewart Investors, and Realindex.
Back in November the bank revealed that it had entered into an agreement to sell the business to Mitsubishi UFJ Trust and Banking Corporation (MUTB) for a total cash consideration of ~$4.13 billion.
The company made the move after announcing its intention to demerge its wealth management and mortgage broking businesses.
At the time, CEO Matt Comyn, explained: "CFSGAM is a high quality business that has achieved strong growth under CBA's ownership for over 18 years. MUTB is one of the largest asset managers in Japan, with a long history and deep capabilities. We believe that CFSGAM's clients and employees will benefit from MUTB's supportive long-term ownership."
Mr Comyn also described the agreement as an important milestone in the bank's strategy to "focus on its core banking businesses and to create a simpler, better bank."
Pleasingly, on Thursday CBA advised that all regulatory approvals have been received and that the divestment is expected to complete early next month. The final sale proceeds are now expected to be $4.2 billion, subject to completion adjustments.
After recently agreeing to sell its Count Financial to Countplus Ltd (ASX: CUP), this means the bank's NewCo segment will now be left with just Financial Wisdom, Aussie Home Loans, and its 16% stake in Mortgage Choice Limited (ASX: MOC).
Interestingly, a note out of Goldman Sachs this morning reveals that its analysts believe this divestment could mean a special dividend is coming with the bank's results next month.
