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25 Sep 2019, Stella Zlatareva, EMIS M&A Team

Thailand's TMB Bank buys local rival Thanachart Bank in the country's largest banking M&A deal

Consolidation in Thailand’s finance and insurance sector in the past two months produced some of the country’s largest-ever acquisitions. First was the takeover of Thailand’s fifth-largest insurer, the life insurance arm of Thai lender Siam Commercial Bank (SCB), for more than USD 3bn in July.

Then in August, Thai lender TMB Bank inked the buy of local peer Thanachart Bank in the top deal in all emerging markets this month. At THB 130bn (USD 4.23bn), the transaction was dubbed Thailand’s largest banking M&A deal and creates the country’s sixth-largest bank with assets of USD 59bn and around 10 million retail customers.

Among the synergies expected is a boost in deposits and lending, particularly the hire purchase operation of TMB Bank.

To fund the purchase, TMB Bank plans to gain USD 3.26bn through a capital increase. Dutch banking group ING, currently the largest shareholder in TMB with a 30% interest, vowed to retain its position as a major shareholder in the enlarged entity. Thanachart Bank’s major investors Thanachart Capital, Canadian lender Scotiabank, and the Thai finance ministry will also keep substantial shareholdings.

The move comes as the government is backing M&A of small- and medium-sized banks to increase their competitiveness. Further consolidation in banking is not ruled out.

Original source: EMIS - DealWatch