(RTTNews) - Financial services firm HSBC Holdings Plc (HBC: News ,HSBA.L: News ) Friday said that it has completed the acquisition of 88.89% of PT Bank Ekonomi Raharja Tbk or Bank Ekonomi, for US$607.5 million in cash through its subsidiary HSBC Asia Pacific Holdings, UK, Ltd.
As per the terms of the agreements, HSBC is required to make a Mandatory Tender Offer for a further 10.11% of Bank Ekonomi, which will be distributed to shareholders, subject to approval by the local regulators. Bank Ekonomi will operate as a separate entity to HSBC's existing Indonesian business and remain listed on the Indonesian stock exchange, the company said.
Rakesh Bhatia, chief executive officer of HSBC in Indonesia stated, "The HSBC Group has long viewed Indonesia as a market with substantial opportunities for growth." Further, the company said that Bank Ekonomi is one of the largest providers of SME banking services to the fourth most populous nation and the acquisition will almost double HSBC's presence in the country to 207 outlets in 26 cities, which will facilitate an expanded Indonesian customer base.
Sandy Flockhart, chief executive officer of HSBC Asia Pacific said, "Indonesia's GDP is forecast to grow by 2.5 per cent this year and by 4.5 per cent in 2010 - bucking the global downturn and demonstrating the country's emerging strength. Bank Ekonomi and HSBC can play a central role in this success story, helping Indonesia's SMEs drive one of the world's most exciting economies."