Facing a shrinking domestic market and years of rock-bottom interest rates, Japan’s biggest banks have for years sought out overseas targets.
TOKYO:Japan’s Mitsubishi UFJ Financial Group is in final talks to acquire a 20% stake in Indian non-bank financial institution Shriram Finance for more than 500 billion yen ($3.22 billion), Bloomberg News reported on Monday.
MUFG is planning to announce the acquisition this week, Bloomberg said, citing multiple sources familiar with the matter. The news sent shares of Shriram Finance up as much as 2.7% to an intraday high.
The final acquisition price will depend on Shriram Finance’s share price movement and so may exceed 500 billion yen, the report said.
MUFG declined to comment, while Shriram Finance did not immediately respond to Reuters’ request for comment.
Shriram Capital Limited (SCL) acts as the umbrella holding entity for Shriram Group’s insurance (Shriram Life, Shriram General) and financial services arms, while Shriram Finance focuses on lending, but all operate under the larger Shriram Group umbrella with SCL as the main promoter. SCL holds significant stakes in both Shriram Life and Shriram General Insurance, which are joint ventures with Sanlam.
Facing a shrinking domestic market and years of rock-bottom interest rates, Japan’s biggest banks have for years sought out overseas targets.
Rival Sumitomo Mitsui Banking Corporation holds a 24.2% stake in Indian private sector lender Yes Bank.
With inputs from Reuters