Singapore’s DBS bank in $7.3 billion takeover

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Singapore’s DBS Group has declared on April 2 that is going to buy Indonesia’s Bank Danamon for $7.3 billion in a deal which is the biggest foreign takeover ever for Indonesia.

DBS, a banking and finance group partly owned by the city state’s sovereign investment holding  Temasek, said it will buy  Bank Danamon in a cash-and-share transaction. The group wants to expand its business in a bid to become a leading bank in the region with a focus on its key markets of Greater China, South Asia and Southeast Asia.

The offer for Bank Danamon came with a 52 per cent premium on the bank’s share price as of Friday, March 30.

DBS said it plans to complete the deal in the second half of this year after seeking regulatory and shareholder approval in Singapore and Indonesia. Danamon is a commercial bank in Indonesia with approximately 3,000 branches, six million customers and 62,000 staff. Net income last year rose 16 percent to $367 million.

Analysts say that a takeover of this size could become a test for Indonesia’s foreign investment strategy, as local banking rivals are expected to block the deal. The country did recently run promotions to attract foreign investors to various sectors of its economy.

The deal is also a reminder of the 2006 sale of the majority share of Thailand’s Shin Corporation to Temasek Holdings, a deal that caused great controversy in Thailand.

However, the Bank Danamon deal is likely to trigger more foreign bank takeovers in Indonesia. Shares in Bank Panin Indonesia, one of the five largest in the country,  jumped six per cent on April 2 on bets that it also could become a target.

DBS also said that it wants to expand in Malaysia and is negotiating to buy a 14 per cent interest in Alliance Financial Group, one of the larger financial service providers in the country.

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Reading Time: 2 minutes

Singapore’s DBS Group has declared on April 2 that is going to buy Indonesia’s Bank Danamon for $7.3 billion in a deal which is the biggest foreign takeover ever for Indonesia.

Reading Time: 2 minutes

Singapore’s DBS Group has declared on April 2 that is going to buy Indonesia’s Bank Danamon for $7.3 billion in a deal which is the biggest foreign takeover ever for Indonesia.

DBS, a banking and finance group partly owned by the city state’s sovereign investment holding  Temasek, said it will buy  Bank Danamon in a cash-and-share transaction. The group wants to expand its business in a bid to become a leading bank in the region with a focus on its key markets of Greater China, South Asia and Southeast Asia.

The offer for Bank Danamon came with a 52 per cent premium on the bank’s share price as of Friday, March 30.

DBS said it plans to complete the deal in the second half of this year after seeking regulatory and shareholder approval in Singapore and Indonesia. Danamon is a commercial bank in Indonesia with approximately 3,000 branches, six million customers and 62,000 staff. Net income last year rose 16 percent to $367 million.

Analysts say that a takeover of this size could become a test for Indonesia’s foreign investment strategy, as local banking rivals are expected to block the deal. The country did recently run promotions to attract foreign investors to various sectors of its economy.

The deal is also a reminder of the 2006 sale of the majority share of Thailand’s Shin Corporation to Temasek Holdings, a deal that caused great controversy in Thailand.

However, the Bank Danamon deal is likely to trigger more foreign bank takeovers in Indonesia. Shares in Bank Panin Indonesia, one of the five largest in the country,  jumped six per cent on April 2 on bets that it also could become a target.

DBS also said that it wants to expand in Malaysia and is negotiating to buy a 14 per cent interest in Alliance Financial Group, one of the larger financial service providers in the country.

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