MUFG to make strategic investment in Bank Danamon
Mitsubishi UFJ Financial Group commercial banking entity The Bank of Tokyo-Mitsubishi UFJ announced that it has entered into conditional share purchase agreements with Asia Financial and other affiliated entities, to acquire their shareholding interests in Indonesian bank PT Bank Danamon Indonesia, subject to applicable regulatory approvals. AFI is a wholly-owned subsidiary of Fullerton Financial Holdings. The Sellers currently hold in aggregate, 73.8% shareholding interests in Danamon. This strategic investment by MUFG will be executed through three steps and completion of the Proposed Transaction will result in MUFG becoming the largest shareholder in Danamon. It will also bolster MUFG's growth strategy in Asia & Oceania and contribute to the overall development of the Indonesian banking sector. MUFG will acquire an initial 19.9% stake in Danamon, based on a price of 61c per share and at an investment amount of $1,171M. The price was based on a 3Q17 P/B of 2.0x with certain adjustments applied. AFI will continue to be the majority shareholder in Danamon upon closing of Step 1, which is expected to be within a few days. MUFG intends to then seek regulatory and other relevant approvals to acquire an additional 20.1% to increase its stake in Danamon to 40%. This step is expected to close between Q2 - Q3 of 2018, subject to receiving these approvals. Upon completion of Step 2, MUFG intends to seek the necessary approvals to increase their stake in Danamon beyond the 40%, and this will provide an opportunity for all other existing Danamon shareholders to either remain as shareholders or receive cash from MUFG. With the closing of Step 3, MUFG's final stake in Danamon is expected to be over 73.8%.