DBS buys Danamon as regional banking race heats up
Singapore bank’s $4.9 billion takeover in Indonesia adds spice to the battle to become Southeast Asia’s leading banking group
Banks such as DBS and Malaysia’s CIMB are determined to build on their strong bases in domestic markets and become regional players.
DBS will buy a 67% controlling stake in Danamon that is currently owned by the Singaporean state investment agency, Temasek – which is also a leading shareholder in DBS.
DBS will pay a hefty 56% premium to the current Danamon share price in a deal valuing the target at $4.9 billion.
As well making DBS one of the top five overall banks in Indonesia, the purchase should give the Singaporean bank access to one of the fasted-growing investment banking markets in Asia.
As Clifford Lee, DBS’s head of fixed income, told Euromoney in January: “We were born in this region, we’ve invested in it for a long time...The competition is harsh but we just have to psych ourselves accordingly to take them on.”