JAKARTA (TheInsiderStories) – PT Bank Danamon Indonesia Tbk (IDX: BDMN) and PT Bank Nusantara Parahyangan Tbk (IDX: BBNP), members of Mitsubishi UFG Financial Group (MUFG) announced plans to merge their business this year. The merger of the two banks will be effective on May 1, 2019.
Based on the press releases received, the draft merger is awaiting approval from the competent authorities, shareholders of both banks, as well as complete other formal requirements needed in similar transactions.
MUFG’s management believes that its investment in Bank Danamon will provide added value to all of Bank Danamon customers and franchises, and support banks to become the leading banks in Indonesia.
“Bank Danamon will be able to access MUFG’s strengths, expertise and network to facilitate the growth of Bank Danamon in realizing long-term value for all stakeholders,” explained Bank Danamon.
This synergy includes financing for the automotive supply chain, retail banking, digital innovation, and risk management capabilities. All of this will be carried out through the transfer of knowledge and technology from MUFG and its business partners in Asia to all employees of Bank Danamon.
The timetable for the merger of Bank Danamon and BNP is the listing of each list of shareholders Bank Danamon and BNP who have the right to attend and use voting rights at each of the Bank Danamon General Meeting of Shareholders (RUPS) and BNP on March 1 2019.
Then, on March 11, 2019, Bank Danamon and BNP will receive an effective statement from the Financial Services Authority for the merging statement.
Furthermore, on March 26, 2019, a general meeting of shareholders Bank Danamon and BNP will be held. Then on 30 April 2019 was the last shares trading in the Indonesia Stock Exchange of Bank Danamon and BNP before merging. So far, on May 1, 2019, the merger of the two banks will be effective.
Meanwhile, the IDX revoked the suspension or temporary suspension of trading in Bank Danamon and Bank Nusantara Parahyangan shares after being suspended on Monday, January 21, 2019.
Head of Corporate Valuation Division IDX, Goklas Tambunan, revealed that the suspension of BDMN and BBNP shares was revoked following the information disclosure of both parties regarding planned mergers or business mergers.
Previously, Japan’s Mitsubishi UFG Financial Group (MUFG) had agreed to acquire 73.8 percent or a majority stake of Bank Danamon, that would be purchased in three phases. Based on the agreed share price per unit, the total acquisition price would reach US$ 5.9 billion.
The two parties entered into conditional share purchase agreements with Temasek’s unit Asia Financial (Indonesia) Pte. Ltd. and other affiliated entities on Dec. 26 to acquire Bank Danamon shares, subject to applicable regulatory approvals.
In the first phase, the bank acquired an initial 19.9 per cent stake in Danamon or, based on a price of Rp 8,323 per share (US$ 0.61) and at an investment amount of Rp 15.875 trillion (US$ 1.17 billion).
Upon completion of the second step, MUFG sought the necessary approvals to increase their stake in Bank Danamon to 73.8 percent. This will provide an opportunity for all other existing Danamon shareholders to either remain as shareholders or receive cash from MUFG.
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