Thanachart Bank has reached an agreement to acquire almost 48% of Thailand-based Siam City Bank. The stake in Siam City Bank is currently owned by Thailand's Central Bank through the Financial Institutions Development Fund (FIDF). Canada-based Scotiabank owns 49% of Thanachart Bank.

In accordance with securities laws in Thailand, upon closing of the 48% stake Thanachart Bank will launch a tender offer for the remaining shares in Siam City Bank. Subsequent to completion of the tender offer and any additional regulatory approvals, Thanachart Bank and Siam City Bank would be merged.

However, the Scotiabank would continue to own 49% of the merged bank, to be known as Thanachart Bank with Thanachart Capital owning almost all of the remaining 51%.

As part of the financing for this transaction, Scotiabank and Thanachart Capital would subscribe on a pro rata basis to additional shares in Thanachart Bank with Scotiabank contributing approximately CAD$650m in capital to the bank. Upon completion of the merger, the combined bank is expected to have more than 660 branches, 2,100 Automated Banking Machines, and 18,000 employees.

Banterng Tantivit, chairman of Thanachart Bank, said: “We are very pleased to have successfully concluded discussions with the FIDF. We look forward to the completion of the transaction and the merger with Siam City Bank, which will create the fifth largest bank in Thailand, further strengthening the country’s banking sector and bringing increased consumer choice to the market.”

Rob Pitfield, head of international banking at Scotiabank Group, said: “Scotiabank remains committed to pursuing the right growth opportunities and this agreement is a significant step forward in Asia to complement a diversified emerging market strategy in the Caribbean, Central America and Latin America.”

Michele Kwok, senior vice president of Scotiabank in Asia/Pacific and the Middle East, said: “Just over one year ago we increased our stake in Thanachart Bank to 49%, and today we are seeing once again the growth opportunities that are present in the attractive Thai market. We look forward to the opportunity to work with our colleagues at Thanachart Bank and Siam City Bank and build on our abilities to serve this market and our over four million customers in Thailand.”