Japan's Mitsubishi UFJ Financial Group (8306.T), opens new tab is in final talks to acquire a 20% stake in Indian non-bank financial institution Shriram Finance (SHMF.NS), opens new tab 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. 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(8316.T), opens new tab holds a 24.2% stake in Indian private sector lender Yes Bank (YESB.NS), opens new tab. India's business news daily Economic Times was the first to report MUFG's talks for a 20% stake in Shriram Finance in October. The following month, Shriram Finance told the country's stock exchanges that reports of a stake sale were "factually incorrect".
