KUALA LUMPUR One of Malaysia's leading financial conglomerates, Commerce Asset-Holding Berhad (CAHB), announced today that it had signed an agreement to acquire 51 percent of Indonesia's PT Bank Niaga Tbk.

CAHB said it would pay 26.5 rupiah per Niaga share, valuing the 51 percent stake at some 1,057.35 billion rupiah (US$120 million), equivalent to a price to book value ratio of 1.48 times.

The deal was signed with Indonesian Bank Restructuring Agency (IBRA), CAHB said in a statement.

"This is a groundbreaking development that will enhance greater economic integration and inter-dependence among Asean (Association of Southeast Asian Nations) members, especially with the onset of Afta (Asean Free Trade Area).

"CAHB's acquisition of Niaga is expected to create one of the leading financial institution platforms in both Malaysia and Indonesia," said Rozali Mohamed Ali, director of CAHB and the CEO of Bumiputra-Commerce Bank.

Ninth largest Indon bank

"With a strong platform and cultural affinities, the new franchise will be positioned to take advantage of future growth in the retail and consumer sectors as well as in inter-Asean trade flows.

CAHB is the second largest banking group in Malaysia with a market capitalization of over US$2.2 billion and total group assets of almost US$21 billion.

Niaga is the ninth largest bank in Indonesia with assets of over US$2.7 billion as of June 30, 2002.

IBRA chairman Syafruddin Temenggung announced in September that CAHB had been selected as final bidder for the 51 percent government stake in Bank Niaga.

In June, the Financial Sector Policy Committee cancelled the sale of the majority interest in Bank Niaga after final bids, filed by Commerce and ANZ Panin consortium, came in at 20-30 rupiah per share, well below the bank's 75 rupiah share price at that time.

IBRA then relaunched the sale and accepted interest from four investors. AFP