Three Malaysian banking groups halt merger talks

“We had thoroughly deliberated the merger, and while we remain convinced that the combination of our three franchises follows sound strategic logic, we ultimately were not able to arrive at a value-creating transaction for all stakeholders,” Zafrul Tengku Abdul Aziz, acting chief executive officer of CIMB Group, said yesterday.

“The decision to cease discussions was arrived at after a detailed review of potential synergies that could be realistically delivered, especially in the current economic environment.

“We would like to put on record our sincere appreciation to the board of directors and management of RHB Capital and MBSB for their full cooperation during our discussions,” he said.

Kellee Kam, managing director of RHB Capital, said: “We undertook the discussions of the proposed merger on the premise that we would be able to arrive at a value-enhancing proposal for our stakeholders and bring it to our respective shareholders. 

“Protecting and creating stakeholder value is paramount to all parties and given the changes in the environment we could not conclude a case to proceed further. 

“Nonetheless, we would like to thank all the parties involved in the discussions for the time and effort spent. We wish CIMB and MBSB well in all their future endeavours.” 

Ahmad Zaini bin Othman, president and CEO of MBSB, said the opportunity to be a part of a mega Islamic bank was an exciting one. 

“Given that the discussions have ceased, we can now continue to focus on the strength of our franchise and achieving the goals that we have originally set for ourselves. We thank everyone involved for their hard work.”

CIMB and RHB have withdrawn their application to Bank Negara Malaysia, the country’s central bank. The exclusivity agreement entered by the parties has also been terminated with the cessation of talks.

CIMB is Malaysia’s second-largest financial-services provider and one of Asean’s leading universal banking groups. It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services. 

Headquartered in Kuala Lumpur, the group is now present in nine of the 10 Asean nations – Malaysia, Indonesia, Singapore, Thailand, Cambodia, Brunei, Vietnam, Myanmar and Laos. 

Beyond Asean, the group has a market presence in mainland China, Hong Kong, Bahrain, India, Sri Lanka, Australia, Taiwan, South Korea, the United States and Britain.