JAKARTA (TheInsiderStories) – Two Indonesian lenders, PT Bank Danamon Indonesia Tbk (IDX: BDMN) and PT Bank Nusantara Parahyangan Tbk (IDX: BBNP), a member of Japan’ Mitsubishi UFJ Financial Group Inc. (MUFG), officially merged after completed the legal process. This merger has been effective since May 1, 2019, said the management on Tuesday (09/03).
Following the legal merger, all rights and obligations, as well as assets and liabilities of Bank BNP shall be transferred to Bank Danamon. With the completion, MUFG Bank Ltd., core banking under MUFG will become the controlling shareholder of the newly merged bank.
Both banks will be undertaking an operational merger process over the course in the next several months.
After finalizing the merger, the company appointed Yasushi Itagaki to replace Sng Seow Wah as the president director of Danamon. Sng Seow Wah will retire from Bank Danamon as President Director on Oct. 1, 2019.
Itagaki is a seasoned banker with more than three decades of experience in corporate and investment banking. Over the past few years at MUFG, he has designed and strategized its Asean commercial banking network.
He played a significant role in the development of MUFG’ strategic partnerships with Bank Danamon, in addition to Krungsri in Thailand, Security Bank in the Philippines and VietinBank in Vietnam.
After joining Bank Danamon as Global Alliance Strategy Director in 2018, Itagaki has been an invaluable catalyst for synergistic collaborations between Bank Danamon and MUFG in both business and management platform areas for future sustainable growth.
Indonesia’s Financial Service Agency (FSA) has granted approval for MUFG Bank, to increase its investment in Bank Danamon on July 31, 2018.
Takayoshi Futae, MUFG’ CEO for Asia & Oceania region said: “As one of the leading banks in Asia & Oceania, we have long recognized Indonesia’s role as one of the key drivers of the region’s development and have sought to establish a stronger presence in the country.”
He added Bank Danamon’ acquisition would make a very welcome and strategic addition to the MUFG group as we press on with the lender’s regional strategy.
Based on the company’ statement, MUFG Bank increased its investment in the local bank to 40.0 percent by acquiring (directly or indirectly) an additional 20.1 percent from Singapore’ Asia Financial (Indonesia) Pte. Ltd. (AFI) and other affiliated entities, as part of second Step of the proposed transaction outlined in its announcement on Dec. 26, 2017.
Upon the completion of this acquisition, MUFG Bank will become a controlling shareholder with 40.0 percent, AFI with 33.8 percent and public 26.2 percent in shareholding interests in Bank Danamon.
Last year, MUFG Bank has entered into conditional share purchase agreements with AFI and other affiliated entities to acquire their shares in BDMN. AFI is a wholly-owned subsidiary of Singapore-based Fullerton Financial Holdings Pte. Ltd.
Before the announcement, the sellers hold in aggregate 73.8 percent share of the local bank. The strategic investment by MUFG Bank will be executed through three steps, and completion of the proposed transaction will result in the Japanese bank becoming the largest shareholder in Bank Danamon.
It will also bolster MUFG Bank’ growth strategy in Asia and Oceania also contribute to the overall development of the Indonesian banking sector. The first step, MUFG acquired an initial 19.9 percent stake in BDMN, based on a price of Rp8,323 a share or in total Rp15.88 trillion.
At the second step, MUFG Bank acquired an additional 20.1 percent to increase its stake in BDMN to 40 percent. The last step upon completion of the second step, MUFG Bank get an approval to raise its stake in Bank Danamon beyond the 40 percent. With the closing of all steps, MUFG Bank’ final stake in the bank is expected to be over 73.8 percent.
In Indonesia, MUFG Bank has been operating for 50 years and currently has full services two branches in Jakarta and Surabaya, and nine service points across the country.
Currently, MUFG Bank has invested in a 77 percent stake in Bank of Ayudhya Public Company Limited (Krungsri) in Thailand, 20 percent in VietinBank in Vietnam and 20 percent in Security Bank Corporation in the Philippines.
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