Mitsubishi UFJ Financial Group’s (MUFG) plan to acquire a stake in HDFC Bank’s consumer lending unit HDB Financial Services has been stalled due to disagreements over the impact on the Japanese lender’s business strategy, Bloomberg reported.
Earlier this year, MUFG was reported to be considering acquiring a 20% stake in HDBF for about $1.7 billion.
Sources familiar with the matter said MUFG remains interested in HDB Financial Services but that these differences could delay or even cause the ongoing talks to fall apart.
An alternative for HDFC could be an initial public offering of its consumer lending unit.
The question is how much control MUFG will have over HDBF’s strategy, but no final decision has been made so far.
Negotiations could be restarted if MUFG is given a greater say in decision-making.
MUFG’s pursuit of the deal reflects HDB Financial Services’ broader strategy to expand its presence in India, where it offers a range of services including personal loans, gold loans and car loans.
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