by NUR HAZIQAH A MALEK / pic by TMR file
CIMB Group Holdings Bhd has entered into a sale and purchase agreement to divest its 20% stake in CIMB-Principal Asset Management Bhd (CPAM) and 10% in CIMB-Principal Islamic Asset Management Sdn Bhd (CPIAM) for a total consideration of RM470.29 million.
The second-largest lender based on asset said the 20% stake in CPAM will be disposed of to Principal International (Asia) Ltd (PIA), while 10% in CPIAM will be disposed of to Principal Financial Services Inc (PFI).
The transaction to PIA involved 24.69 million shares while the disposal to PFI involved 1.2 million shares, in CPIAM, CIMB told Bursa Malaysia yesterday.
Following the disposal, the agreement will increase Principal Financial Group’s stake in the joint ventures (JVs) to 60% while CIMB retains 40%.
The proposed transaction is expected to finalise by the second quarter of this year. It is subjected to regulatory approvals.
CIMB group CEO Tengku Datuk Seri Zafrul Aziz said that scale and extensive investment expertise are important to banking industry, coupled with strategic realignment that will strengthen the JV’s value proposition.
“The shareholding realignment will ensure our asset managements’ JVs with Principal Financial achieves its maximum potential and continues to create value for CIMB,” he said in a statement.
“Scale and extensive investment expertise are important to this business, and we believe this strategic realignment will enhance the value proposition of the JV to enable us to serve our customers better,” he added.
He said the realignment would allow CIMB to realise gains from the investment, and CIMB will continue to participate in the partnership with its 40% interest.
CIMB and Principal Financial’s partnership was established in 2004 and it has expanded to Singapore, Indonesia and Thailand.
The CPAM JV has more than RM70 billion in assets under management.
Last year, CIMB disposed of its 18.21% stake in Bank of Yingkou Co Ltd to Shanghai GuoZhiJie Investment Development Co Ltd for 1.51 billion yuan (RM958.68 million) cash, or about one times the price-tobook value. CIMB share price rose one sen yesterday to close at RM6.75.