IBK acquires Indonesia’s Bank Agris in first overseas M&A
PUBLISHED :February 06, 2018 - 16:19
UPDATED :February 06, 2018 - 16:20
[THE INVESTOR] The government-run Industrial Bank of Korea will acquire a major stake in Indonesia’s Bank Agris in its first-ever overseas acquisition, the lender confirmed on Feb. 6.
Korea’s sixth-largest bank in terms of assets will buy an 82.59 percent state in Indonesia-listed lender Bank Agris for an undisclosed amount from its current largest shareholder Dian Intan Perkasa. The deal is subject to an approval at the Bank Agris’ general shareholders’ meeting on Feb. 9.
The M&A comes less than two years after IBK CEO Kim Do-jin promised overseas takeovers during his three-year tenure. With a 261 million population and an estimated 2,000 Korean companies there, Indonesia has been IBK’s primary target for its first overseas acquisition. The overseas acquisition also marks the first among Korean policy banks.
IBK CEO Kim Do-jin
IBK is also mulling an acquisition of another Indonesian bank before the end of this year, according to an official at the bank. The Indonesian financial authorities, which are trying to trim the number of some 110 local banks, allow foreign investors to buy a stake in a bank of up to 40 percent if the investor purchase stakes in one bank. But those that invest in two or more banks are exempt from such restrictions. After completing merger and acquisitions of two Indonesian banks, IBK plans to launch IBK Indonesia, the official said.
Making a foray into Indonesia as a foreign financial institution is tough due to stringent requirements and red tape. Most Korean commercial banks have entered Southeast Asia through M&As.
In 2015, Shinhan Bank acquired a 98 percent stake in Indonesia’s Bank Metro Express and 75 percent of Centratama Nasional Bank. Woori Bank bought a 74 percent stake in Bank Saudara, which now renamed as Bank Woori Saudara.