LGsuper and City Super, both of Brisbane, Australia, confirmed their A$5.5 billion (US$5.46 billion) merger.
LGsuper and City Super will merge effective June 30, 2011, with J.P. Morgan becoming common custodian and Towers Watson, the consultant to both funds, prior to that date, to “enable a more straightforward rationalization of the fund’s investments,” according to current City Super CEO Karen Gibson.
In an echo of Health Super’s recent deal with First State Super, the smaller fund, City Super, will carry only two directors onto the board of the merged entity, while all of the LGsuper directors will remain in place. Two additional independent directors also will be sought.
Current LGsuper CEO, David Todd, will run the merged fund while Ms. Gibson will be assigned a “senior management role,” in a merged secretariat that has promised to find room for all the employees of both funds.
The LGsuper model of internal administration will prevail in the new entity, with City Super’s administrator, Mercer, assisting in the transition.
Meanwhile, the proposed A$8 billion merger of Maritime Super, Sydney, and Auscoal Super, Warners Bay, Australia, first hinted at in November 2009, could be in doubt with talks due to resume in February.
Announcing the talks to Maritime Super members in July, Maritime Union of Australia President Paddy Crumlin said he expected a final determination around October as to whether the two funds could merge.
Last week, there were rumblings from some stakeholders that the merger was off the agenda permanently; however, the funds denied this.
The CEO of Maritime Super, Peter Robertson, said, “At this stage, the two funds remain in discussion with the next meeting set for February 2011.”
An Auscoal spokesman said “no decision has been made to merge at this time,” and echoed that the resumption of discussions was set for February.
The two funds have a history of cooperation, for example co-investing on several unlisted asset deals.
Michael Bailey writes for I&T News, Sydney.