Reuters: Deals: DBS to pay $7.2 billion for Indonesia's Bank Danamon

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DBS to pay $7.2 billion for Indonesia's Bank Danamon Apr 2nd 2012, 00:39 By Saeed Azhar and Kevin Lim SINGAPORE | Sun Apr 1, 2012 8:39pm EDT SINGAPORE (Reuters) - DBS Group Holdings (DBSM.SI), Southeast Asia's biggest bank, has agreed to pay S$9.1 billion ($7.24 billion) for Indonesia's Bank Danamon (BDMN.JK) in shares and cash, stumping up a premium of around 52 percent 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 S$6.2 billion in shares to buy a 67.37 percent 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 ($0.77) per Danamon share. DBS said it would issue 439 million new shares to Temasek TEM.UL at S$14.07 each. The state investor already owns about 29 percent 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 percent stake in Alliance Financial Group (ALFG.KL). 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. The biggest challenge will be persuading investors that DBS has not overpaid, as it did when it bought Hong Kong's Dao Heng Bank more than a decade ago. Gupta, 52, has spent a large part of his career in India and Southeast Asia - areas where DBS is keen to grow - but he will be tested in Indonesia where rules on foreign bank ownership change frequently. DBS had record net profit of more than S$3 billion ($2.39 billion) last year. Credit Suisse and Morgan Stanley are DBS's joint financial advisers, while WongPartnership LLP and Hadiputranto, Hadinoto & Partners are legal advisers. ($1 = 1.2574 Singapore dollars) ($1 = 9144.0000 Indonesian rupiahs) ($1 = 1.2574 Singapore dollars) (Reporting by Saeed Azhar and Kevin Lim; Editing by John O'Callaghan and Mark Bendeich) Link this Share this Digg this Email Reprints

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