Dutch consumer lender Home Credit announced that it has agreed to sell its Philippine and Indonesian businesses to a consortium composed of affiliates of Japan’s Mitsubishi UFJ Financial Group (MUFG) for 596 million euros (about $621 million).
In a statement on Thursday, Home Credit said the deals, which are expected to be completed within 2023, will be made through MUFG’s affiliates and will be led by Thailand’s Krungsri Bank.
The MUFG affiliates that are participating in the deal include its Japanese unit MUFG Bank, Adira Finance (a subsidiary of Bank Danamon, which is an affiliate of MUFG), and a local Indonesian investor.
Krungsri and MUFG Bank will acquire 75% and 25%, respectively, of Home Credit Philippines for a valuation of 406 million euros. Krungsri, Adira and a local Indonesian investor will purchase 75%, 10%, and 15%, respectively, of Home Credit Indonesia for a valuation of 209 million euros.
The deals are subject to Krungsri shareholders’ approval as well as customary regulatory approvals, Home Credit said.
The acquisition comes 10 years after Home Credit launched in both the Philippines and Indonesia. Jean-Pascal Duvieusart, CEO of Home Credit Group, said both these markets have played key roles in Home Credit.
“It is now the right time for us to pass the baton onto new shareholders who can accelerate growth for these two exciting businesses as they approach this new phase,” Duvieusart added.
Home Credit offers point-of-sales financing services that are available in stores worldwide. In the Philippines, customers only need to be employed and have a valid ID to qualify for a loan, which is mostly used to pay for electronic gadgets and appliances.
Since launch, it has lent to approximately 8 million customers nationwide and has approximately 9 million registered mobile application users.
Home Credit Indonesia, on the other hand, has lent to approximately 5 million customers and has approximately 11 million registered mobile application users.
In July, Home Credit Indonesia secured a $10.4-million ESG-linked loan facility from Deutsche Bank to push financial services and inclusive growth in Indonesia.
