NISP Astra International to conclude acquisition on General Electric Services (ASII, Rp49,750, Buy)

• Astra International to complete acquisition over General Electric Services (GES) from General Electric Capital Corporation (GECC) in September 2010. With this acquisition, Astra will own 100% ownership in GES, hence 47% GES ownership in Astra Sedaya Finance. Astra also plans to acquire GECC’s 47% ownership at Sedaya Pratama, which will make Astra as the sole owner in Sedaya Pratama.

• With this acquisition, Astra ownership on ASF will increase to 100% from current position at 53%. However, as ASF is already consolidated in Astra’s book, this acquisition has no impact to profit and loss.

• Astra will employ its internal cash to finance this acquisition where the company’s cash stood at Rp11.80tn in 1H10.

• Currently, ASII is trading at 2011F PER of 14.5x and EV/EBITDA of 10.5x, Buy.