Bank of Ayudhya Public Company Limited (SET: BAY) has announced that its Board of Directors acknowledged that an agreement have been reached for the acquisition of business through the purchase of 99.1% of the share capital of Capital Nomura Securities Public Company Limited (CNS) from Nomura Asia Investment (Singapore) Pte Ltd. (NAIS) with an intention to offer to purchase up to 0.9% of the share capital of CNS from minority shareholders of CNS totaling up to 100% of the share capital of CNS with total consideration of up to approximately USD 155.3 million or approximately THB 5,501 million.
BAY noted that it expected the acquisition of CNS to increase its competitive advantage of BAY’s securities business whereby the combination of CNS’s and its securities trading value will allow the market position to increase to the top 15 among Thai securities companies. The increased scale would potentially allow economies of scale leading to better cost management capabilities and better margins for the Bank’s securities business in the long run.
Combining BAY’s current and CNS’s capital markets service capabilities, which includes financial advisory and underwriting service for securities, debentures, warrants, and unit investments would allow the bank to have a more comprehensive suite of products and services to cater to the demands of corporate clients of the bank that will help accelerate the growth of the bank’s capital markets business.
The announcement from BAY came after the report from Nikkei Asia earlier stating that Mitsubishi UFJ Financial Group will acquire a Nomura Holdings securities unit in Thailand for more than 90% of the shareholding stake amounting THB5.4 billion through the MUFG-owned Bank of Ayudhya.
The report stated that the Japanese banking group intended to leverage its own customer base and bring more retail investors to securities.
Capital Nomura Securities (CNS) is a securities unit of Nomura Holdings located in Thailand. The firm has strong business in online sales of investment trusts while being able to expand its market as Thailand has the largest securities market in Southeast Asia with a trading value of around THB14 trillion.
Mitsubishi UFJ Financial Group currently holds a 76.88% stake in BAY, one of Thailand’s largest commercial banks. Meanwhile, NSL Client Account – Nomura Asia Investment (Singapore) Pte. Ltd. currently holds a 99.10% stake in Capital Nomura Securities.