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Foreign companies go ahead with acquisition plans despite COVID-19 pandemic
Taiheiyo Cement Corporation has signed a partnership agreement with state-owned PT Semen Indonesia and plans to acquire a 15 percent stake in its subsidiary PT Solusi Bangun Indonesia.
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Signed and sold: Bangkok Bank president Chartsiri Sophonpanich (second right), Astra International president director Prijono Sugiarto (second left), Standard Chartered corporate development group head David Churchman (right) and Astra vice president director Djony Bunarto Tjondro sign conditional sale and purchase agreements on Bangkok Bank’s acquisition of 89.12 percent of Bank Permata’s shares from Astra and Standard Chartered in Jakarta on Dec, 12, 2019. (Antara/Hama)
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number of multinational companies are pressing on with their mergers and acquisitions in Indonesia despite the uncertain global economic conditions and threat of a recession caused by the COVID-19 pandemic.
Japanese cement producer Taiheiyo Cement Corporation announced on April 22 that it had signed a partnership agreement with state-owned PT Semen Indonesia and planned to invest US$220 million to buy a 15 percent stake in its subsidiary PT Solusi Bangun Indonesia (SBI).
Taiheiyo said in a statement that the alliance with Semen Indonesia and SBI was aimed at boosting its business in the long term as cement demand in Japan might decline due to the aging population.
“Although we believe cement demand will remain at a certain level in the medium term due to infrastructure renewal and disaster prevention and mitigation, we expect demand will decline in the long run caused by a declining birth rate and aging population,” the Japanese firm wrote.
Banks are also seeing acquisition on the horizon despite the ongoing pandemic. Bangkok Bank, for example, will likely go ahead with its plan to acquire an 89.12 percent stake in Bank Permata from current shareholders PT Astra international and Standard Chartered.
The initial agreement for the acquisition of Bank Permata’s shares was signed in December 2019, but it has not been realized. Bangkok Bank recently installed its executives as Bank Permata's new commissioners, signaling that it will soon conclude the deal.
Both Astra and Standard Chartered, which each own 44.56 percent of Bank Permata’s shares, seem also to be committed to selling their stakes to Bangkok Bank as both parties agreed on April 20 to lower the selling price to 1.63 times Bank Permata’s book value, from 1.77 times its value previously.
