CIMB Group Holdings (CIMBGH) today announced that it has entered into conditional Share Purchase Agreements (SPA) with San Miguel Properties, Inc, San Miguel Corporation Retirement Plan and various minority shareholders (collectively referred to as the vendors) for the proposed acquisition of 60 percent of Bank of Commerce (BoC) in the Philippines.

The acquisition will be made by CIMB Bank at a price of PHP 181.25 per share. The total consideration for the acquisition of approximately PHP 12,203 million (equivalent to approximately RM881 million) will be settled in cash. BoC is valued at a price to book of 1.14x as at 31 December 2011; but upon full alignment with CIMB Group’s accounting and provisioning policies, the effective price to book is expected to be about 1.30x.

In conjunction with the acquisition, CIMB Bank has also entered into a Collaboration Agreement with San Miguel Corporation (SMC) for the continued support of the SMC ecosystem to BoC. This is to build and foster closer work collaborations between CIMB Group and SMC Group. The San Miguel Corporation Retirement Plan will remain the largest minority shareholder of BoC at 27 percent.

“As an Asean universal bank, this extension to the Philippines is a very natural one. I believe we are entering this market at the right time, with the right deal and right partner,” said Nazir Razak, group chief executive, CIMB Group.

Incorporated in December 1963, BoC is the 16th largest bank in the Philippines in terms of total assets. It offers a wide range of banking and other financial products and services including traditional deposit products, corporate banking, consumer banking, treasury, asset management, trust services, trade and credit card services targeting consumer, small-to-medium enterprises and corporate customers.

BoC currently operates 122 branches and 300 ATMs throughout the Philippines.

“BoC is small today but it can grow quickly with its low loan to deposit base and high capital ratios. BoC also strengthens CIMB Group’s overall regional value proposition of facilitating intra-Asean investments and trade as well as travel,” said Nazir. “With this acquisition, our retail network will increase to 1,239 full branches, reaffirming our credential of having Asean’s largest branch footprint.”

- Bernama