The Hongkong and Shanghai Banking Corporation Limited, through its whollyowned subsidiary HSBC Asia Pacific Holdings (UK) Limited, has entered into agreements to acquire 88.89% of PT Bank Ekonomi Raharja Tbk (Bank Ekonomi) for a consideration of US$607.5 million (or IDR2,452 per share) to be paid in cash from HSBCs own resources.
The acquisition will enhance HSBCs commercial banking business in Indonesia, extend the Groups presence in the retail banking sector and almost double HSBCs network to over 190 outlets in 24 cities across the country.
“This acquisition underlines HSBCs stated strategy to invest in fast growing emerging markets,” says Sandy Flockhart, HSBC Holdings plc executive director and chief executive officer of HSBC Asia Pacific. “With almost 125 years presence in the country we recognise the enormous growth opportunities ahead for Indonesia, with a GDP growth over 5.5% in each of the past three years, rich natural resources, thriving commodities trade and foreign direct investment inflows, favourable demographics and the worlds fourth largest population of 235 million people. This acquisition increases our presence in Indonesia, putting us in the top three foreign banks in the country. HSBC will deliver its full local, regional and international capabilities to our expanded Indonesian customer base, offering the breadth and depth of product and service quality for which HSBC is renowned.”
“Bank Ekonomi will nearly double our reach across Indonesia and provide a firm footing in the commercial and retail banking sectors,” says Rakesh Bhatia, chief executive officer of HSBC in Indonesia. “Its strong SME banking and retail lending franchise will complement HSBCs global expertise in all business lines.”
Under the terms of the agreements, HSBC will acquire a 38.84% stake from PT Lumbung Artakencana, 38.60% from PT Alas Pusaka and 11.45% from individual shareholders of Bank Ekonomi. Under Indonesian law, HSBC will be required to make a Mandatory Tender Offer (MTO) for a further 10.11% of Bank Ekonomi. Details of the MTO will be published in the Indonesian press and distributed to Bank Ekonomi shareholders in accordance with local regulations. The transaction is subject to obtaining the necessary regulatory approvals in Indonesia and elsewhere.
HSBC was advised on the acquisition by the Global Banking and Markets division of the HSBC Group.
D.C.