JAPAN’S Mitsubishi UFJ Financial Group (MUFG) has agreed to buy a controlling stake in Thailand’s Bank of Ayudhya for up to 560bn yen (£4.3bn) as Japanese lenders expand into fast-growing Southeast Asian economies to beat slower growth at home.
MUFG’s purchase of up to 75 per cent of Thailand’s fifth largest lender would be the biggest acquisition by a Japanese bank in Southeast Asia. It also ends General Electric’s six-year-old investment in Ayudhya, with GE raising $2.41bn (£1.59bn) by selling its stake in the Thai bank in two tranches.
The deal requires approval from Thailand’s finance ministry as foreign ownership in domestic banks is capped at 49 per cent. MUFG told a briefing it believes Bangkok would “take a favourable view” and said it was considering merging its Thai operations with Ayudhya to comply with Thailand’s single presence policy on bank ownership.
MUFG has sizable operations in Japanese corporations in Thailand, where Toyota Motor and other conglomerates own manufacturing plants.
Under the terms of the deal, MUFG will make a tender offer priced at 39 baht per share, allowing GE to sell its entire 25.33 per cent stake in the Thai bank.
Thailand’s Ratanarak Group, which founded the bank in 1945, has agreed to retain a 25 per cent stake in Ayudhya.
The tender offer is expected to start in early November and end in December, the statement added. Morgan Stanley advised GE, while Bank of America Merrill Lynch advised MUFG.