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Singapore Tycoon Wee Cho Yaw’s UOB To Buy Citi’s Southeast Asia Consumer Business For $3.6 Billion

United Overseas Bank—controlled by billionaire Wee Cho Yaw—has agreed to acquire Citigroup’s consumer banking business across Indonesia, Malaysia, Thailand and Vietnam as the Singapore lender accelerates expansion across Southeast Asia.

The purchase consideration is about S$4.9 billion ($3.6 billion), which includes a premium of S$915 million on top of the business’ aggregate net asset value of S$4 billion as of June last year. The price tag will be adjusted based on the NAV of the business when the deal is completed, which is expected to take place between mid-2022 and early 2024 subject to regulatory approvals.

“The acquired business, together with UOB’s regional consumer franchise, will form a powerful combination that will scale up UOB Group’s business and advance our position as a leading regional bank,” UOB deputy chairman and CEO Wee Ee Cheong said in a statement. Ee Cheong is the eldest son of banking and real estate tycoon Wee Cho Yaw, who is currently the bank’s chairman emeritus after stepping down in 2013.

The deal comes after Citigroup agreed last month to sell its Philippine consumer banking business to Union Bank of the Philippines, which counts the Aboitiz family, one of the country’s richest clans, as its biggest shareholder.

Citigroup plans to exit its consumer banking franchises across 13 markets in Asia, Europe, the Middle East and Africa. The divestments are expected to release approximately $7 billion of allocated tangible common equity over time.

“Focusing our business through these actions will facilitate additional investment in our strategic focus areas, including our institutional network across Asia Pacific, driving optimal returns for Citi,” Peter Babej, Citi Asia Pacific CEO, said.

The acquisition will add 2.4 million customers across UOB’s key markets in Indonesia, Malaysia, Thailand and Vietnam, more than doubling the group’s regional customer base to about 5.3 million. The Citigroup regional business, which generated income of about S$500 million in the first half of 2021, will be immediately earnings accretive to UOB, the Singapore-based lender said.

“UOB believes in Southeast Asia’s long-term potential and we have been disciplined, selective and patient in seeking the right opportunities to grow,” Wee said.

UOB, Singapore’s third-largest lender by assets, was cofounded in 1935 by Wee Cho Yaw’s father Wee Khiang Cheng as United Chinese Bank. Apart from his controlling interest in the bank, Wee, 93, holds significant stakes in real estate companies including UOL Group and Kheng Leong. With a net worth of $6.8 billion, he was ranked No. 9 on the list of Singapore’s 50 Richest that was published in August.

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