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Japanese banks next bets for Temasek Holdings' stake in Indonesian bank

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August 1
10:07 AM 2013

Singapore sovereign investor Temasek Holdings will need to find a bank from Japan or China to buy its stake in Bank Danamon Indonesia, Reuters reported. This came after its negotiations to sell its stake in the Indonesian bank collapsed. Had it pushed through, the deal would have been worth USD 7.2 billion, making it one of the biggest in Southeast Asia.

Talks lasted for 16 months but Singapore's DBS Group Holdings backed out after a recent Indonesian rule change. Foreign investors can no longer own more than a 40% stake in the country's domestic banks. DBS Holdings originally wanted to acquire the 67% stake that Temasek held to be able to gain control. Reuters commented that owning a controlling stake in companies they acquire in Southeast Asia is a key ingredient in making their investments worthwhile.

On the other hand, Japanese banks may settle for less. Sources told Reuters that Mitsubishi UFJ Financial Group was originally interested in the acquisition. Although the Japanese bank made a USD 5.6 billion bid to purchase Bank of Ayudhya in Thailand recently, it may still want to get Temasek's stake.

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