In the mid-1990s, the Queensland Government began reviewing options to privatise two significant state-owned businesses.
The first, Queensland Industrial Development Corporation (QIDC), started life in 1902 as the Queensland Agricultural Bank, while the second - Suncorp - was formed from the State Government Insurance Office. The objective was to return equity to the government and allow the two institutions access to private capital markets to fund growth and diversification, thereby securing the future of these important Queensland financial institutions.
1994 historical downtown waterfront skyline Brisbane, Queensland, Australia. Photograph by Russell Kord ARCHIVE via Alamy.
The three-way merger between Suncorp, QIDC and Metway Bank became the largest corporate transaction in Queensland's history.
Queensland Treasury appointed Ken MacDonald from Allens antecedent firm Feez Ruthning to advise on the transaction. This involved the complex task of writing new legislation to bring these government-run institutions into public ownership – a challenging undertaking when no one knew what form the final entity would take.
It soon became apparent that the best approach lay in merging Suncorp and QIDC with ASX-listed Metway Bank, Queensland's largest bank. However, this proposed structure was complicated by the fact that Metway was already in merger discussions with Sydney-based St.George Bank.
On 26 June 1996 the Metway Bank board took an increased St.George offer to its shareholders at an extraordinary general meeting at the Brisbane Convention Centre. It looked certain the deal would go through. Little did the board know that MacDonald was hovering in the wings, poised to present a revised offer that he and his team had been drafting in a nearby meeting room on behalf of the Queensland Government. Halfway through the meeting MacDonald approached Metway chairman Frank Haly to inform him that a higher offer was on the table. The meeting was immediately adjourned.
The Queensland Government emerged victorious and the three-way merger between Suncorp, QIDC and Metway Bank became the largest corporate transaction in Queensland's history. The $19 billion deal created the nation's fifth-largest financial services group and Suncorp Metway (as it became known) entered the ASX as one of Australia's top 30 companies by market capitalisation.
At the time, Feez Ruthning partner Martin Kriewaldt was chairman of Suncorp. It was a sign of the government's trust in both the firm and MacDonald - they had been appointed to manage this highly sensitive transaction, despite Kriewaldt's connection.
In 2002 Suncorp Metway changed its name to Suncorp.