BANK MANDIRI ACQUIRED INHEALTH AND CONSOLIDATED INSURANCE MARKET POSITION.

December 31, 2013

Mergers & Acquisitions


BACKGROUND

In 2013, when the Government of Indonesia (GOI) decided to implement a national health care system and simultanously introduced a social security system, GOI soon realized it was facing a dilemma as PT ASKES (Persero), the State Owned Health Insurance Company had to be transformed into a Social Security Provider, BPJS. To overcome this issue, the Government of Indonesia appointed three state owned company : PT Bank Mandiri Tbk , PT Kimia Farma Tbk and PT Jasindo (Persero) to become the new shareholders of Inhealth through an acquisition process with an IDR 1.7 Trillion price tag. Bank Mandiri, the Government of Indonesia’s proposed majority shareholder of Inhealth, appointed MDC as legal counsel for all aspects during the acquisition process.

THE DEAL

The acquisition involved divesting the state owned company’s share , PT ASKES, whereby simultaneously, PT ASKES was in the process of changing its legal status into a public legal entity as a social security provider. PT ASKES became BPJS, Indonesia's first national security sysrem.   The acquisition of Inhealth was implemented under two stages. Under the first stage or the transitional stage, Bank Mandiri acquired 60 % of Inhealth Shares whilst Kimia Farma and Jasindo each acquired 10 % of the shares. During the first stage of the acquisition process. PT ASKES retained 20 % of the shares. As PT ASKES completed its transformation becoming BPJS in early 2015 as a Social Security Provider, the remaining 20 % of PT ASKES was acquired by Bank Mandiri.

THE RESULT

The new shareholder composition of PT Inhealth has become : Bank Mandiri 80 % , Jasindo 10 % and Kimia Farma 10 %. The acquisition served as a winning solution for the Government of Indonesia, the Indonesian consumers and for Bank Mandiri. Indonesia , at last, has developed a special body responsible for the provision of health and welfare care for its citizens while Bank Mandiri was able to strengthen its market position as a complete financial service provider in banking, financial and insurance. Bank Mandiri who is in joint venture with a global French financial service company AXA as AXA Mandiri Financial Services, stands to consolidate its product offering through the acquisition of PT Inhealth.