DBS Group Holdings of Singapore agreed on Monday to buy Bank Danamon of Indonesia for $7.2 billion in one of the largest ever takeovers in Southeast Asia’s financial services industry.
DBS, which already is the region’s largest bank, said it would pay $4.9 billion in new shares to Temasek Holdings, the Singaporean sovereign wealth fund, for its 67 percent stake in Danamon.
DBS would offer the other investors in the Indonesian bank a combined $2.3 billion in cash for their remaining shares, according to a company statement.
The deal is expected to close by the end of the year.The cash-and-share takeover will allow Temasek, which already owns a 29 percent stake in DBS, to increase its share to 40 percent.
The acquisition of Danamon is an effort by DBS to tap the growing demand for banking services in Indonesia, one of Asia’s fastest growing economies.
The bank said the country was an attractive opportunity because of its expanding middle class and rising levels of domestic consumption. DBS said it expected Indonesia to become one of its largest sources of revenue, alongside Hong Kong and Singapore.
“Danamon is a highly attractive franchise with an established platform, market leading positions and a very capable management team,” the DBS chief executive, Piyush Gupta, said in a statement. “With Danamon, we will be able to significantly diversify our revenue mix.”
Under terms of the deal, DBS will issue 439 million new shares at $11.22 a share to buy Tamasek’s stake in Danamon.
The bank will then purchase the remaining shares in the bank for 77 cents each, 52 percent above Danamon’s closing price on Friday.
DBS also said on Monday it had begun talks to acquire a 14 percent stake in the Alliance Financial Group of Malaysia, which is also owned by Temasek. The deal would be worth roughly $270 million.
Credit Suisse and Morgan Stanley and the law firms Wong Partnership and Hadiputranto, Hadinoto & Partners advised DBS on the deal, while Citigroup advised Danamon.
nytimes.com
DBS, which already is the region’s largest bank, said it would pay $4.9 billion in new shares to Temasek Holdings, the Singaporean sovereign wealth fund, for its 67 percent stake in Danamon.
DBS would offer the other investors in the Indonesian bank a combined $2.3 billion in cash for their remaining shares, according to a company statement.
The deal is expected to close by the end of the year.The cash-and-share takeover will allow Temasek, which already owns a 29 percent stake in DBS, to increase its share to 40 percent.
The acquisition of Danamon is an effort by DBS to tap the growing demand for banking services in Indonesia, one of Asia’s fastest growing economies.
The bank said the country was an attractive opportunity because of its expanding middle class and rising levels of domestic consumption. DBS said it expected Indonesia to become one of its largest sources of revenue, alongside Hong Kong and Singapore.
“Danamon is a highly attractive franchise with an established platform, market leading positions and a very capable management team,” the DBS chief executive, Piyush Gupta, said in a statement. “With Danamon, we will be able to significantly diversify our revenue mix.”
Under terms of the deal, DBS will issue 439 million new shares at $11.22 a share to buy Tamasek’s stake in Danamon.
The bank will then purchase the remaining shares in the bank for 77 cents each, 52 percent above Danamon’s closing price on Friday.
DBS also said on Monday it had begun talks to acquire a 14 percent stake in the Alliance Financial Group of Malaysia, which is also owned by Temasek. The deal would be worth roughly $270 million.
Credit Suisse and Morgan Stanley and the law firms Wong Partnership and Hadiputranto, Hadinoto & Partners advised DBS on the deal, while Citigroup advised Danamon.
nytimes.com
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