Posted on 05 Feb 2009
Bank of Ayudhya Public Company Limited (BAY) and American International Group, Inc. (AIG) announced an agreement under which BAY will acquire AIG Retail Bank Public Company Limited and AIG Card (Thailand) Company Limited. The transaction, subject to the approval of the Bank of Thailand and BAY's shareholders, is expected to be completed in April 2009.
Under the terms of the agreement, BAY will acquire 99.5 percent of the shares of AIG Retail Bank and 100 percent of AIG Card (Thailand) for a total consideration of Baht 2.055 billion or US $58.7 million (subject to closing valuation adjustment). In addition, inter-company loans totaling US $477 million from AIG will be repaid at closing.
The combined assets of the two companies are expected to increase BAY's assets by approximately Baht 32 billion, which brings its current assets from approximately Baht 745 billion to 777 billion. The transaction will increase BAY's retail loans by 14 percent and approximately 220,000 credit cards in force.
Mr. Tan Kong Khoon, President and Chief Executive Officer, Bank of Ayudhya PCL, said,"We are pleased with this opportunity. The acquisition of AIG Retail Bank and AIG Card Thailand emphasizes Bank of Ayudhya's strategy in its inorganic growth plan. It is another step forward in accelerating the Bank's consumer banking business after the GECAL acquisition in 2008. The transaction will add 14 percent to our retail portfolio bringing BAY's retail loan portion to 36 percent. This acquisition will strengthen our leading position in Thailand's banking sector. At the same time, customers of AIG Retail Bank and AIG Card will benefit from an easy access to one-stop financial services and a wide range of consumer financial solutions offered by BAY."
AIG Retail Bank President and CEO Charly Madan said, "AIG Retail Bank is an institution of the highest quality. We believe this outcome serves the best interests of both companies, as well as our valued customers, who we are confident will benefit from Bank of Ayudhya's financial strength, comprehensive distribution network and extended product lines. We are committed to continue providing excellent service to our customers during the transition period and we are thankful for their confidence and support."
Blackstone Advisory Services provided financial advice to AIG in connection with AIG's global restructuring program. Deutsche Bank acted as financial advisor and Linklaters served as legal counsel to AIG on this transaction.
Phatra Securities acted as financial advisor and Allen & Overy (Thailand) served as legal counsel to Bank of Ayudhya on this transaction.