[wanita-muslimah] Singapore’s DBS Group Set To Swallow Indonesia's Bank Danamon

 

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Singapore's DBS Group Set To Swallow Indonesia's Bank Danamon

Francezka Nangoy | April 03, 2012

 

Singapore lending giant DBS Group is set to buy a controlling stake in Indonesia's Bank Danamon in a record takeover deal.

 

DBS, Southeast Asia's biggest banking group, will buy 67.4 percent of Danamon from Asia Financial Indonesia, a unit of Singaporean empire Temasek, for 6.2 billion Singapore dollars ($4.9 billion).

 

"We have a mission to be an Asian bank," DBS chief executive Piyush Gupta said on Monday. "We already grew very well in China and India through organic growth, now we are expanding in Indonesia as the third-biggest growth country in Asia."

 

DBS, also controlled by Temasek, has agreed to pay Rp 7,000 for each Danamon share, a 52 percent premium to the bank's Friday share price of Rp 4,600. Danamon's stock was suspended for trading on Monday and will resume trading today.

 

The transaction is expected to be completed "within the next six months, toward the end of the year," Gupta said.

 

DBS is set to offer to buy the remaining shares from minority stockholders at the same price. Should all shareholders sell, DBS would complete the purchase for 9.1 billion Singapore dollars.

 

This would be DBS's biggest purchase, eclipsing the $5.4 billion it paid for Hong Kong's Dao Heng Bank Group in 2001, according to Bloomberg data.

 

But at 2.62 times Danamon's book value, the purchase didn't beat Maybank's $2.7 billion 2008 acquisition of Bank Internasional Indonesia from Temasek at a record 4.7 times.

 

DBS will pay for the stake via a stock swap that involves issuing 439 million new shares valued at 14.07 Singapore dollars apiece to Temasek. This transaction will result in Temasek owning 40 percent of DBS's enlarged capital, from 29 percent currently, Gupta said.

 

The transaction will also help Danamon become fifth-biggest bank by assets in Indonesia, eclipsing CIMB Niaga.

 

DBS also controls DBS Bank Indonesia, and taking over Danamon will widen DBS's presence in the country.

 

"We are very strong in corporate banking, while Danamon has a strong presence in retail and mass market," Gupta said. "In small- to medium-sized enterprise [lending], we have the expertise, while Danamon has the network."

 

To comply with Bank Indonesia's single-presence regulation, DBS Indonesia will be merged with Danamon.

 

However, the bank has yet to decide on the details. "We haven't talked about branding yet, but Danamon is a big name in Indonesia and we want to leverage on that," he said.

 

Bank Danamon operates more than 3,000 branches and 3,000 ATMs, including through alliances with other banks under the ATM Bersama banner. By comparison, DBS Bank Indonesia, which has been in the country since 1997, only has 40 branches.

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