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AMMB-RHB in talks again: report
Posted on Monday, 20 March 2017 13:26
The Edge Malaysia Weekly has revisited old rumours of a merger between AMMB Holdings and RHB Bank that could pave the way for the creation of the country’s fourth-largest banking group by assets.
A source told the publication key shareholders of both financial institutions have discussed the matter over the last few months, to the extent that an accountancy firm is working on some aspects of the mooted amalgamation.
The hiring of the advisor is all very “hush-hush given the sensitivity” of the process, and only a small group of people are aware of what is going on, especially as some of the talks have taken place outside Malaysia.
However, the source cautioned everything is still in the early stages and nowhere near the point where the banks would need to ask regulator Bank Negara Malaysia for permission to officially open up negotiations.
Analysts told the Edge while the two would fit well together, they have overlapping business so any reorganisation is likely to lead to redundancies and other cost saving measures.
Employees Provident Fund currently owns stakes in both organisations, 40.7 per cent in RHB and 11.7 per cent in AMMB, and any merger agreement would also need to curry favour with two foreign shareholders.
Australia and New Zealand Banking Group owns almost 24.0 per cent of the holding group also known as AmBank and has not hidden its desire to create a simpler structure by exiting non-core business and minority investments.
The Edge suggested the lender’s second-largest shareholder, founder and chairman, Tan Sri Azman Hashim, may divest his own 12.9 per cent stake as he begins scaling back his involvement ahead of his retirement.
However, it noted any tie-up would need to get past RHB’s 17.7 per cent investor Aabar, which put up a fight against a proposed merger between CIMB Group, RHB and Malaysia Building Society a couple of years ago.
© Zephus Ltd