Yahoo Finance OCBC Indonesia to buy over Commonwealth Bank’s stake in Indonesian subsidiary for A$220 mil
The transaction is slated to be completed around the second or third quarter of 2024.
The Indonesian subsidiary of Oversea-Chinese Banking Corporation, PT Bank OCBC NISP Tbk (OCBC Indonesia), has agreed to buy Commonwealth Bank of Australia’s (CBA) stake in CBA’s 99%-owned Indonesian banking subsidiary, PT Bank Commonwealth (PTBC). OCBC Indonesia and CBA had entered into a share sale and purchase agreement (SPA) on Nov 16.
OCBC Indonesia will pay an upfront cash consideration of approximately A$220 million or IDR2.2 trillion (approximately $191 million). The consideration will be fully funded through OCBC Indonesia's internal cash as it has "sufficient resources". The bank is also looking to acquire the remaining 1% of PTBC's shares from the rest of its shareholders.
While CBA has been involved in the growth of PTBC since 1997, the sale of its stake is in line with the bank’s strategy to focus on its banking business in Australia and New Zealand moving forward, says CBA in an announcement on the Australian Exchange (ASX).
The completion of the transaction is subject to several conditions including regulatory approvals from the Monetary Authority of Singapore (MAS) and the Indonesia Financial Services Authority (Otoritas Jasa Keuangan or OJK).
It is slated to be completed around the second or third quarter of 2024. Following the completion, PTBC will be merged into OCBC Indonesia, which will be working with the former to migrate its customers and employees to ensure a smooth transition.
“CBA looks forward to working with OCBC Indonesia over the coming months on the transition of ownership,” adds the Australian bank in its Nov 16 statement.
PTBC focuses on the retail and small- and medium-sized enterprise (SME) segments with a range of banking and wealth management products. PTBC has over 1.2 million customers with total assets of A$1.8 billion and net assets of A$390 million as at June 30.
"The proposed acquisition adds scale to OCBC Indonesia and deepens OCBC Bank’s presence in Indonesia. PTBC’s customer base of retail and small and medium-sized enterprise customers is complementary with OCBC Indonesia. As there is little overlap in customer relationships between OCBC Indonesia and PTBC, the proposed acquisition is expected to create synergies and strengthen the franchise value of OCBC Indonesia," says OCBC in its Nov 16 statement.
As at 10.49am, shares in OCBC are trading 6 cents lower or 0.47% down at $12.82.
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