DBS to pay $4.9 billion for Temasek's Bank Danamon stake

DBS Group Holdings early yesterday confirmed that it has entered into an agreement to buy Temasek Holdings’ 67.4% stake in Bank Danamon Indonesia for Rp45.2 trillion $4.9 billion, which will be paid entirely through the issuance of new shares to Temasek.

DBS will also make a mandatory tender offer to Danamon’s minority shareholders. If the tender is accepted in full, the acquisition will cost DBS a total of $7.2 billion. This would make it the largest-ever MA transaction in Indonesia and the second largest in Southeast Asia, according to Dealogic.

Singapore-listed DBS will pay Rp7,000 per share, which translates into a 52.2% premium to Danamon’s...