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Indonesia : Bank Rakyat to finalize Bank Agro acquisition in Q3.

State-owned lender PT Bank Rakyat Indonesia (BRI) is in the final stages of realizing its acquisition plan of 80 percent shares in PT Bank Agroniaga Tbk (AGRO), which is worth around Rp 300-400 billion, said Bank Rakyat president director Sofyan Basir.

"We will announce the complete information on the acquisition plan after conducting an extraordinary shareholders meeting in August," Sofyan said after a meeting with central bank officials in Jakarta on Monday.

The state-bank has been announcing the acquisition plan from last year, but the plan has been delayed several times due to administrative problems.

"We have filed the request *to acquire Bank Agro* to the central bank and are still waiting for its permission," said Sofyan, estimating the acquisition would take place in the third quarter.

State-owned Enterprises Minister Mustafa Abubakar has previously stated he allows Bank Rakyat to further process the acquisition plan, in hopes of spurring the bank's lending in the agricultural sector. Bank Agro would not change its name after the acquisition, but would focus more on the agricultural business sector, Mustafa said.

Bank Rakyat is also planning to acquire one more bank as it has planned to allocate Rp 2 trillion in funds from its subordinated bond release last year for acquisitions of banks.

"We need to ask our shareholders first *about the other acquisition*," said Sofyan, estimating it would take place next year. The bank is currently still working on the Bank Agro acquisition.

Shares in Bank Agro significantly dropped by 11.22 percent after the planned size of acquisition was announced Monday, to close at Rp 182 per share. Bank Rakyat shares stayed at Rp 9,950 per share at the end of the Monday trading session.

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Date:Jul 27, 2010
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