New Zealand firm Chapman Tripp has spearheaded the merger of MARAC Finance, CBS Canterbury and Southern Cross Building Society to create financial services group, Heartland. The group is expected to become New Zealand’s only listed, locally controlled, registered bank after the shares are listed on New Zealand's premier equities market NZSX by the end of January. The merger was made official on January 7.
The merger involved amalgamating three businesses with more than NZ$2bn of assets; a forthcoming IPO of 300 million shares; the transfer of approximately NZ$1.7bn of debt securities from three different issuers; the transfer of engagements from the merging building societies to the new operating vehicle; the conversion of two building societies into companies; and the implementation of a court approved scheme of arrangement.
“This merger has been a complex and challenging deal to work on, particularly in light of the need to devise a transaction structure which gave certainty to the parties and achieve a merged entity within the current legislative framework,” said lead partner Barry Brown.
Chapman Tripp advised on all legal aspects of the merger, including devising the transaction structure. As there is no legislation which provides for the merger of a building society and a company, Chapman Tripp sequenced procedures from both the Building Societies Act and the Companies Act to ensure a secure and successful merger. These procedures included converting the building societies into companies, effecting an amalgamation pursuant to a Court order scheme of arrangement and establishing a new building society operating vehicle. This is the first time such a merger has been attempted in New Zealand.
The transaction team also included partners Tim Tubman, Mark Reese and Adam Ross, principals Cathryn Barber and Chad Morgan and senior solicitor Rachel Dunne.
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