DBS Group Holdings, Southeast Asia’s biggest bank, has agreed to pay $9.1 billion for Indonesia’s Bank Danamon in shares and cash, stumping up a premium of around 52% to become the country’s fifth-biggest lender.
Singapore-based DBS, which is making the move as part of its goal to become a leading Asia-wide bank, said on Monday it would initially pay $6.2 billion in shares to buy a 67.37% stake from Singapore state investor Temasek Holdings.
It would then buy out Danamon’s minority investors for cash, with both the share and cash payments pitched at 7,000 rupiah (95.7 cents) per Danamon share.
DBS said it would issue 439 million new shares to Temasek at $14.07 each. The state investor already owns about 29% of DBS.
When combined with DBS’ existing Indonesian assets, the acquisition would make DBS the country’s fifth-largest lender.
In the same statement, DBS said Malaysia’s central bank had allowed it to begin talks with a unit of Temasek to buy an effective 14% stake in Alliance Financial Group.
These acquisitions would be the first major deals by DBS Chief Executive Piyush Gupta, who took the helm of the Singapore-based lender in late 2009.
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