BII-Danamon to Merge

The merger of BII and Bank Danamon is getting close to reality following Temasek Holdings Pte Ltd's announcement-through Fullerton Financial Holdings Pte Ltd-that merger was one of the preferred options.

Fullerton as the holder of the majority stake in BII had informed its plan to adjust the ownership structure-in the wake of the application of the single presence policy-to the central bank (BI).

One of Fullerton's preferred options is to merge BII and Bank Danamon once follow-up evaluations are completed and permissions from the related institutions issued. After the due diligence process is finished, Fullerton will be able to evaluate whether it should merge BII and Danamon or whether it should divest its stake in BII.

If selling its stake in BII is more profitable than merger, Fullerton will choose the former. The leader of Sorak Financial consortium stated it could at any time take necessary measures to facilitate the sales.

Once the authority gives its approval, Fullerton can implement the option chosen by the end of December 2010 as required in the single presence policy. BII is currently owned by Sorak Financial Holding Pte Ltd (55.89%), Citibank Singapore (6.04%), UBS AG London (6.57%), and the public (less than 5%). BII is the sixth largest bank in Indonesia and until September 2007 had booked IDR53.8 trillion in assets.

Temasek Holdings Pte Ltd also holds a 68.05% stake in PT Bank Danamon Indonesia Tbk through the Asia Financial consortium, which is a subsidiary of Fullerton.

However, Fullerton added the company wanted to have clear tax obligations concerning the merger. Fullerton explained if the merger was considered unable to bring any benefit, the company could at any time sell its stake in BII.