By Kim Yoo-chul
The Industrial Bank of Korea (IBK) is in talks with two banks in Indonesia aiming to purchase major stakes in them by March.
The acquisition, if successful, will be the first overseas mergers and acquisitions (M&A) deal of the Seoul-based lender, officials said Tuesday.
"After due diligence and an approval from IBK's stakeholders, the bank plans to complete the acquisitions by March at the earliest. As there are some differences in the valuation by the two parties, the final results depend on the talks," said a source in the banking industry here.
Under Indonesian regulations, foreign financial institutes cannot buy more than a 40 percent stake in one Indonesian bank. They have to approach at least two banks after gaining approval from the government there.
To improve the financial soundness of Indonesian banks, Jakarta has continued to reduce their numbers as well as preventing foreign lenders from establishing new offices.
The deal is subject to approval from Indonesian financial regulators. Korea's Ministry of Strategy and Finance holds a 51.8 percent stake in the IBK and the rest is owned by two state-run banks _ the Korea Development Bank (KDB) and the Export-Import Bank of Korea.
IBK said the acquisitions are part of its long-term business expansion plan to become a bigger player in Asia by cutting its heavy reliance on the domestic market.
The Industrial Bank of Korea (IBK) is in talks with two banks in Indonesia aiming to purchase major stakes in them by March.
The acquisition, if successful, will be the first overseas mergers and acquisitions (M&A) deal of the Seoul-based lender, officials said Tuesday.
"After due diligence and an approval from IBK's stakeholders, the bank plans to complete the acquisitions by March at the earliest. As there are some differences in the valuation by the two parties, the final results depend on the talks," said a source in the banking industry here.
Under Indonesian regulations, foreign financial institutes cannot buy more than a 40 percent stake in one Indonesian bank. They have to approach at least two banks after gaining approval from the government there.
To improve the financial soundness of Indonesian banks, Jakarta has continued to reduce their numbers as well as preventing foreign lenders from establishing new offices.
The deal is subject to approval from Indonesian financial regulators. Korea's Ministry of Strategy and Finance holds a 51.8 percent stake in the IBK and the rest is owned by two state-run banks _ the Korea Development Bank (KDB) and the Export-Import Bank of Korea.
IBK said the acquisitions are part of its long-term business expansion plan to become a bigger player in Asia by cutting its heavy reliance on the domestic market.
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