Mitsubishi UFJ Financial Group Inc. is in the final stages of talks to take over Bank of Ayudhya, a major Thai commercial bank, informed sources said.
The parent of Bank of Tokyo-Mitsubishi UFJ aims to acquire a stake of 51 percent or more in the Thai bank through a tender offer, the sources said Saturday.
Bank of Ayudhya has basically agreed to Mitsubishi UFJ’s offer, according to the sources.
Mitsubishi UFJ is expected to spend hundreds of billions of yen to buy Bank of Ayudhya shares from such shareholders as General Electric Co. of the U.S., which currently holds a 25 percent stake, they said.
The takeover would make Mitsubishi UFJ the first Japanese banking group to run a major Asian bank. Mitsubishi UFJ is expected to send board members to Bank of Ayudhya.
Bank of Tokyo-Mitsubishi UFJ (BTMU) is hoping to utilize the Thai bank to expand operations in the country to include lending to small companies and housing loans.
The Japanese bank’s operations in Thailand have so far focused on support through a branch in Bangkok to Japanese companies operating in the Southeast Asian country.
Because Thailand does not allow foreign banks with branches in the country to take stakes in local banks, BTMU plans to integrate its Bangkok branch into Bank of Ayudhya.
The banking group is hoping to utilize its experience in running California-based Union Bank to make Bank of Ayudhya grow larger to meet a variety of financing needs in Asia.
Recently in Asia, BTMU invested some ¥60 billion in Vietnam Joint Stock Commercial Bank for Industry and Trade.
Rival Sumitomo Mitsui Banking Corp., a unit of Sumitomo Mitsui Financial Group Inc., last month announced a plan to invest around ¥150 billion in Indonesia’s Bank Tabungan Pensiunan Nasional.
In both cases, stakes acquired by the Japanese banks were below 50 percent.