Merrill to buy Australian credit-approval company

Merrill Lynch's buyout division and Pacific Equity partners are to buy Australian credit-approval company Veda Advantage for $661 million.

The partnership between the US and Australian investment banks to acquire the largest business of its kind in the territory came after Veda's board unanimously agreed to the offer of $2.93 per share.

News of the acquisition of Veda, which provides credit-checking services for credit-card companies and banks, comes at a time when record levels of household debt in Australia has seen the ratio between debt-to-income double during the last ten years.

Michael Birch, of asset management company Wallace Funds Management, told Bloomberg: `"Consumer credit keeps rising and Veda has a monopoly business. From a user's point of view, they're the only ones with a reliable credit database.''

Since the deal was announced shares in Veda rose by seven per cent to $2.85.

Last year Veda's second-half profit grew by 66 per cent following the sale of the debt collection department of its business for $25 million.

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