TOKYO Japan's Mitsubishi UFJ Financial Group (MUFG) (8306.T) is in advanced talks to acquire a majority stake in Bank of Ayudhya Pcl (BAY.BK), Thailand's fifth-largest lender, in a deal worth over $4 billion, sources familiar with the matter said on Saturday, marking a major turn in the protracted negotiation complicated by Thai regulations.
MUFG, Japan's largest-lender by assets, has been in talks to buy General Electric's 25 percent stake in Bank of Ayudhya for months, but Thailand's single presence policy on bank ownership has turned out to be a big hurdle as the Japanese bank has sizable operations with Japanese corporations in the Southeast Asian country.
In the latest plan discussed among the parties, MUFG will make a tender offer to acquire 51 percent stake from GE and others and merge its Thailand operations with Bank of Ayudhya, said the sources, who were not authorized to talks about the matter publicly.
The deal is likely to be worth about $4.1 billion, the source said. It would mark the biggest acquisition by Japanese banks in Asia.
MUFG President Nobuyuki Hirano has said his company is looking to acquire an Asian bank as the group's hub entity in the region, much as it has successfully done in the United States with California-based UnionBank, as Japanese banks seeks to go beyond wholesale businesses into local retail and small- and mid-size business banking.
Last month, Sumitomo Mitsui Financial Group (8316.T) agreed to buy a 40 percent stake in Indonesian bank BTPN for $1.5 billion.
An MUFG spokesman declined to comment. ($1 = 97.5 yen)
(Reporting by Taiga Uranaka, Taro Fuse and Stanley White; Editing by Nick Macfie)