MUFG to buy Bank of Ayudhya

Japan’s largest bank to pay US$4.1 billion for 51% ownership.

Mitsubishi UFJ Financial Group, Inc. said the agreement to acquire a 51% stake in the Bank of Ayudhya is expected to be announced early July. The deal will transform Thailand's fifth-largest commercial bank into an MUFG subsidiary.

Since Thailand bars foreign banks with local branches from providing capital to its banks, MUFG will merge its Bangkok branch with Bank of Ayudhya.

Bank of Ayudhya has a market capitalization of US$6.1 billion. It handles personal loans and credit cards and is strong in transactions with small- and medium-sized businesses.

The takeover will allow MUFG to offer a wide range of financial services to consumers and businesses in Thailand. This will mark the first time a Japanese bank has taken direct control of a major bank in the rest of Asia.

MUFG will first buy out GE Capital's entire 25% stake in the Thai bank. It will then launch a tender off for the remaining shares, but seek to keep the other big shareholder, Thailand's Ratanarak family which holds 22%, as a partner.