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Mitsubishi UFJ Financial to acquire majority stake in Indonesia's Bank Danamon

Mitsubishi UFJ Financial Group Inc. agreed to acquire 73.8% of PT Bank Danamon Indonesia Tbk in a three-step transaction, subject to regulatory and shareholder approvals, as the former looks to establish a stronger presence in Indonesia.

Bank of Tokyo-Mitsubishi UFJ Ltd. entered into conditional share purchase agreements with Asia Financial (Indonesia) Pte. Ltd. and other affiliated entities to acquire their positions in Bank Danamon Indonesia, totaling 73.8%. Asia Financial (Indonesia) is a wholly owned unit of Singapore-based Fullerton Financial Holdings Pte. Ltd., which in turn is a unit of Singaporean sovereign wealth fund Temasek Holdings (Pte.) Ltd.

The deal, which is subject to regulatory approval, will take place in three parts. Initially, the Japanese lender plans to acquire a 19.9% stake for 8,323 Indonesian rupiah per share, for a total amount of 15.875 trillion rupiah. This transaction is expected to complete in a few days.

Mitsubishi UFJ Financial then plans to increase the stake to 40% with a further 20.1% stake purchase, subject to regulatory approvals. The transaction is expected to complete between the second and third quarter of 2018. Upon completion of the second step, Mitsubishi UFJ Financial intends to raise its stake beyond 40% in the Indonesian lender, at which stage the Japanese company will provide an opportunity to all other existing Bank Danamon shareholders to either remain shareholders or receive cash.

Temasek noted in a statement that it will work closely with Mitsubishi UFJ Financial to enhance value to Bank Danamon's stakeholders during this period.

It was reported in November that Bank of Tokyo-Mitsubishi was interested in acquiring a 40% stake in Bank Danamon.

As of Dec. 25, US$1 was equivalent to 13,565 Indonesian rupiah.