First State Super, a A$105 billion ($69.5 billion) Sydney-based industry fund, and WA Super, a Perth, Australia-based A$4 billion industry fund, are exploring a merger.
The two superannuation funds signed a memorandum of understanding to explore the benefits of a merger and are beginning due diligence that should be completed by midyear, a joint news release Wednesday said.
Additional size and scale should help deliver the best possible returns to participants at the lowest cost, First State Super CEO Deanne Stewart and WA Super CEO Fabian Ross said in the release.
For First State Super, the combination would broaden its footprint in the state of Western Australia. With WA’s 55,000 participants, the merged fund would have about 60,000 participants in the state, according to the release. First State Super currently has 805,000 participants.
If everything proceeds smoothly, a merger could be completed by the end of the year, a First State spokeswoman said in an email.
First State is currently in the final stages of another merger with Melbourne-based VicSuper, which has roughly A$25 billion in assets. The First State spokeswoman said that merger will lift First State’s assets to A$130 billion.
A WA spokeswoman could not be reached for comment.