The merger proposal will be placed before their respective members for approval early in the New Year.
The merger proposal has the unanimous support of both boards, the chairmen of both companies - Graham Kennedy (ABS) and Richard Calvert (SMC) said.
"The agreement to take the merger proposal to our respective members follows an amicable and careful negotiation that we believe leads to a positive outcome for both businesses," they said.
"Looking forward, both businesses can see the logic of pooling their existing customer bases in the pursuit of an enhanced market presence. We are also motivated by the potential to build market share based on a strong Canterbury identity and the personalised customer services that differentiate us within the traditional banking sector."
"There are a substantial number of players in the financial services market after the past few years of rapid growth in the economy and we believe the merger will sustain our competitiveness and position us to meet any future challenges."
Under the proposal approved unanimously by both boards, the vehicle for the merger will be publicly listed ABS Canterbury. The effective merger date is April 1, 2006.
