CBA rattles the four pillars

Any deal that creates a country’s largest domestic bank, its top fund manager and the second biggest insurer will have ramifications for all market participants. The Commonwealth Bank of Australia’s (CBA’s) takeover of Colonial Limited also provides a springboard for CBA to launch its international aspirations.

It is the largest takeover in Australian corporate history. CBA is offering seven of its shares for every 20 of Colonial’s in a pure scrip-for-scrip deal. Other than entitlement to dividends, there is no cash on the table at this stage.