Thanachart acquires $1bln Siam City stake

Purchase of 47.6% stake in SCB has given Scotiabank avenue to expand in Thailand.

Thanachart Bank, 49 percent owned by Canada's Bank of Nova Scotia, has agreed to pay $1 billion for a 47.6 percent stake in Siam City Bank in Thailand's biggest acquisition in four years.

Thanachart said it would tender for the remaining shares it does not own in Thailand's seventh-biggest lender at the same price it paid for the stake from the central bank, which would value the whole of Siam City at 68 billion baht ($2.1 billion).

Scotiabank will merge Thanachart Bank with Siam City Bank to create the country's fifth-largest lender in terms of assets and branches, competing with Bank of Ayudhya, which is one-third owned by General Electric's finance unit. The takeover would help Canada's third-largest lender expand its foothold in Thailand's retail banking business.

"Thailand is exactly the type of market we like to invest in. It's also a strong growth platform to continue to develop our international platform for further expansion," Rob Pitfield, Scotiabank's head of international banking, said on a conference call with analysts.

Pitfield said Siam City's operations are highly complementary to Thanachart's, with limited business and branch overlap. The merged bank's porfolio will be almost evenly split between retail and commercial business.

View the full story in Reuters.