Bank of Ayudhya (Krungsri) announced yesterday the 75% majority stake acquisition of the consumer finance business of Home Credit in Indonesia and the Philippines, with an initial total consideration of €473.9 million (17.7 billion baht).
The final consideration will be subject to one-to-one adjustment based on equity book value at the closing of the transaction.
The transaction is subject to approval from the shareholders of Krungsri, the Bank of Thailand, the Financial Services Authority of Indonesia, the central bank of the Philippines and the Philippines Competition Commission.
The transaction must be notified to the Japanese Financial Services Agency, the Securities and Exchange Commission of the Philippines, the Commission for the Supervision of Business Competition of Indonesia, and other relevant regulators. The deals are expected to be completed by the second half of 2023.
The move marks another milestone in Krungsri's goal of Asean expansion, according to the bank's statement.
Krungsri and PT Adira Dinamika Multi Finance, a subsidiary of Bank Danamon, which is a member of MUFG, reached an agreement that Krungsri will buy PT Home Credit Indonesia share capital worth 75%, of which 60% is from Home Credit Indonesia B.V. and 15% from Wanda Ariestiani Evans. PT Adira will buy 10% of PT Home Credit Indonesia from Home Credit Indonesia B.V.
Krungsri also reached an agreement to buy 75% of the shares of HC Consumer Finance Philippines Inc, of which 74.8% are from HC Philippines Holdings B.V. and 0.2% from Filcommerce Holdings Inc. MUFG will buy 25% of HC Consumer Finance Philippines Inc, of which 24.7% is from HC Philippines Holdings B.V. and 0.3% from Filcommerce Holdings Inc. In addition, Krungsri acquires 100% of the share capital of HCPH Financing 1 Inc and HCPH Insurance Brokerage Inc, which are supporting businesses of HC Consumer Finance Philippines.
"We are pleased to announce the acquisition agreements for PT Home Credit Indonesia and HC Consumer Finance Philippines Inc, upon the deals closing following all regulatory approvals," said Seiichiro Akita, Krungsri president and chief executive. "We are confident their local expertise and established networks together with Krungsri's extensive experience in the consumer finance business will enhance their business competitiveness."
PT Home Credit Indonesia and HC Consumer Finance Philippines Inc are key players in the consumer finance industry in their respective markets. They offer consumer loans in the mass and upper-end markets.
"Our synergy will benefit all stakeholders, including local customers in Indonesia and the Philippines. This milestone underscores our commitment to our Asean expansion strategy, paving the way for our aspiration to 'Be the Preferred Thai Bank Connecting Customers' Needs Across Asean'," said Mr Akita.
With strong branding and established omni-channel distribution, both companies have become the leading point of sale loan providers.
As of December 2021, PT Home Credit Indonesia served 11 million mobile app users and extended loans to 5 million customers in Indonesia. HC Consumer Finance Philippines, Inc served 9 million app users and lent to 8 million customers in the Philippines.