Singapore's DBS Group to buy Indonesia's PT Bank Danamon for $7.3 bn
02 Apr 2012
Singapore's DBS Group Holdings, Southeast Asia's largest bank by assets, today said that it plans to buy Indonesia's PT Bank Danamon for S$$9.1 billion ($7.3 billion), the biggest acquisition by a Southeast Asian lender.
Temasek Holdings, Singapore's sovereign wealth fund holds stakes in DBS Group as well as Danamon.
DBS will acquire the 67 per cent stake in Danamon owned by Temasek for $4.9 billion by issuing new shares, and buy the remaining stock from other shareholders for $2.4 billion in cash.
DBS will issue 439 million new shares at S$14.07 each to buy the stake from Temasek, and post transaction, Temasek's stake in DBS will increase to 40.4 per cent from the current 29.5 per cent.
DBS is paying a premium of 56.3 per cent to the average price of Danamon's shares over the past month, and values the Indonesian lender at 2.6 times the book value of its assets.
Post acquisition, DBS will become Indonesia's fifth-largest bank by assets, DBS said in a statement. ''Indonesia's banking sector is highly attractive for DBS given its demographics, strong macroeconomics and fast growing economy,'' it added.