Singapore's United Overseas Bank (UOB) said Wednesday it had bought an 80.77 percent stake in Thailand's Bank of Asia for some 540 million dollars to further its ambition of becoming a regional banking power.
UOB said it bought the stake for 22 billion Thai baht from Dutch bank ABN Amro at 5.35 baht a share, a 9.6 percent premium to the Bank of Asia's closing price of 4.88 baht on Tuesday and a premium of 1.0 percent compared with its average price over the past 30 days.
UOB, which already owns 79 percent of Thailand's smaller UOB Radanasin Bank, said its purchase would increase its banking presence in the kingdom by more than three times although this was off a very small base.
"This acquisition allows us to expand our platform and to elevate the scale of our operations (in Thailand)," UOB chairman and chief executive officer Wee Cho Yaw said in a statement.
"It also marks a significant step forward in our mission to be a premier bank in the Asia Pacific region."
International credit ratings agency Standard and Poor's viewed the purchase as positive for both UOB and Bank of Asia.
"The acquisition is expected to strengthen UOB group's strategic footprint in Thailand," Standard and Poor's said in a statement.
"Thailand has been identified by the UOB group as one of the key markets to further enhance its growth prospects, in line with its target to achieve an overseas revenue contribution of at least 40 percent by 2010."
Standard and Poor's also raised its long-term credit rating for Bank of Asia to BB-plus from BB while its short-term rating was maintained at B.
"(The ratings) reflect the expected support from its major ownership by UOB, in light of its strategically important role within the group," Standard and Poor's credit analyst Nancy Koh said.
UOB said the two banks it now controls in Thailand had an aggregate asset base of 227 billion baht at the end of last year with a combined network of 169 branches and 385 automatic teller machines.
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