Maybank is pleased to announce that it has today entered into a conditional sale and purchase agreement (“SPA”) to acquire up to 100% of Sorak Financial Holdings Pte Ltd (“Sorak”) for a cash consideration of approximately USD1.5 billion (RM4.8 billion) paving the way for Malaysia’s largest financial services group to be the controlling shareholder of Bank Internasional Indonesia (“BII”). The transaction price was agreed on a willing-buyer and willing-seller basis.
Sorak is 75%-owned by Financial Fullerton Financial Holdings Pte. Ltd., a wholly owned subsidiary of Temasek Holdings (Private) Limited, and 25%-owned by Kookmin Bank. Sorak holds about 56% equity interest in BII.
As a result of this transaction, Maybank will also be making a tender offer for the remaining 44.3% shares held by remaining shareholders of BII. The total amount involved for the tender offer is approximately USD1.2 billion (RM3.8 billion), bringing the total value of the potential acquisition to about RM8.6 billion.
Maybank was among several other global financial institutions which participated in a competitive bid to acquire Temasek Holdings’ stake in BII.
BII is listed on the Jakarta Stock Exchange and ranks as Indonesia’s sixth largest bank in terms of assets. BII operates in all major banking segments (corporate banking, SME/commercial banking, consumer banking and wealth management) and has a multi-channel distribution network of over 230 branches and 700 ATMs supplemented by Internet banking and call centre operations.
Maybank Acting Chief Executive Officer Dato’ Aminuddin Md Desa said, “We are delighted with the outcome and are excited moving forward given the significant value in BII’s banking franchise and infrastructure. It provides us with an excellent platform to capitalize on growth opportunities with limited execution risks, coupled with the strong underlying fundamentals of the Indonesian economy. The existing management team is also highly experienced and strategically aligned with Maybank’s aspirations for Indonesia.”
“The strategic and financial rationale for the acquisition is extremely compelling. The acquisition will transform our growth prospects in Indonesia and is a huge step forward in our strategy to regionalize our operations through investments in selected high growth markets. We are excited as the Indonesian banking sector remains under-penetrated with excellent long-term growth potential. BII is well placed to capitalize on this growth potential given its strong market position, extensive multi-channel distribution network and high quality customer base. This acquisition effectively enables Maybank to leapfrog into the Indonesian banking market with a significant, well-established presence and attractive platform for further growth,” he added.
Fullerton Financial Holdings Director Tow Heng Tan said, “Maybank is an established financial institution with an outstanding track record in Malaysia. We are confident that it will lend strength to BII to support its growth in the next phase of its development.”
He added, “We have been most encouraged by the high level of interest in BII – this confirms our own optimism about the prospects for Indonesia over the longer term.”
BII has an established banking franchise in Indonesia with a reputation for service quality and production innovation. Maybank with its solid track record and experience in the Indonesian market is well positioned to leverage on BII’s excellent infrastructure to further grow the business. In addition, there are also significant revenue synergies given the established and rapidly growing presence of Malaysian corporates in Indonesia and the strong trade flows between the two countries. Indonesia is the fourth most populous nation in the world and banking penetration remains relatively low. Prospects for value creation in the medium term are also excellent as Maybank can leverage on its experience in Malaysia to augment the product offering and banking capabilities of BII, particularly in areas such as Islamic banking, bancassurance and Takaful.
Bank Negara Malaysia has given its approval for the proposed acquisition. The proposed acquisition is now conditional upon regulatory approval from Bank Indonesia and the approval of Maybank shareholders.
The proposed acquisition is expected to be completed within six months following the receipt of the above approvals, after which Maybank will make a tender offer for the remaining shares in BII.
Maybank has appointed Aseambankers and BNP Paribas as advisors for the acquisition.