Bank Indonesia will probably have a decision by early May on the proposed acquisition of PT Bank Danamon Indonesia by DBS Group Holdings Ltd., the governor of the central bank said.
Bank Indonesia hasn’t approved the bid yet, Governor Darmin Nasution said in Jakarta today, denying a Wall Street Journal report. The newspaper said on April 13 that Southeast Asia’s largest lender got approval to buy as much as 40 percent of Danamon and will be allowed to build a majority stake later if it meets corporate governance and financial health standards.
DBS is seeking to acquire 99 percent of Danamon for 66.4 trillion rupiah ($6.8 billion) in a transaction that would give it access to more profitable lending opportunities and a faster-growing economy. The sale, announced a year ago, has stalled as Indonesia’s central bank considers approval while seeking greater opportunities for its own lenders in Singapore.
“We have a rule, and they have their intention, so we’re looking for a solution because we also have banks that want to operate there,” Nasution said. “After it’s clear what both sides are willing to commit to, we’ll make our decision.”
The sale price would include the equivalent of 45.2 trillion rupiah to be paid to Temasek Holdings Pte, Singapore’s state-owned investment company, for its 67.4 percent stake.
DBS remains “committed to the transaction,” said Karen Ngui, a Singapore-based spokeswoman for DBS, after Nasution’s comment.