CIMB acquires GK Goh to expand market

The Jakarta Post, Jakarta

Malaysia's biggest investment bank, CIMB Bhd., plans to merge its subsidiary PT CIMB Niaga Securities with PT GK Goh Indonesia after it acquires the stockbroker company from Singapore-based GK Goh Holdings Ltd.

CIMB chief executive Nazir Razak said on Monday the planned merger would allow the two Indonesian securities firms to combine operations in Indonesia.

CIMB would conclude the purchasing of GK Goh Holdings by June at S$239.14 million (US$146 million), Nazir said.

With GK Goh Holdings operations in Singapore, Jakarta, Hong Kong and London, the planned acquisition would improve CIMB's exposure to capital markets and retail clients in those cities.

GK Goh Holdings currently controls 93.4 percent of shares in PT GK Goh Indonesia, which is listed in the Jakarta and Surabaya Stock Exchanges. The company, established in 1990, operates in equities trading, securities underwriting, fixed income-broking and asset management.

CIMB acquired a 51 percent stake in PT Niaga Sekuritas in November and renamed it PT CIMB Niaga Securities. It operates in equity broking, fixed income origination, underwriting and trading, as well as corporate finance advisory. The other 49 percent stake is owned by PT Bank Niaga Tbk.

"We believe the acquisition will make CIMB the largest investment broker in Malaysia, No. 2 in Singapore and seventh in Jakarta," said Nazir.

He said CIMB would be able to expand its business in Indonesia under the name CIMB-GK following the acquisition.

"GK Goh has been well-known internationally. We hope we can bring more foreign investment to Indonesia," he said.

With market capitalization of $1.3 billion as of December 2004, CIMB, which is listed in the Malaysian capital market, is the largest investment bank in Southeast Asia.

CIMB Group's profit at this year's first quarter reached 127.2 million ringgit ($33.5 million) after it earned more from managing bond and share sales, as reported by Bloomberg last week. (001)