Mitsubishi UFJ Financial Group’s talks for a minority stake in HDFC Bank’s consumer finance division have stalled over differences over how much say the company wants in the company’s strategy, according to people familiar with the matter.
While MUFG is still interested in HDB Financial Services, the talks could be delayed further or even fail, said the sources, who requested anonymity because the matter is private. HDFC could consider an IPO of the consumer finance unit as an alternative, one of the sources said.
According to sources, no final decisions have been made yet and negotiations could resume if the Japanese lender is given a significant say in HDBF’s corporate strategy.
A representative for MUFG declined to comment. HDFC Bank did not immediately respond to a request for comment.
MUFG has been trying to expand its presence in India, where HDBF offers services including personal, gold and auto loans. Bloomberg News reported earlier this year that MUFG, Japan’s largest lender, was in talks to buy a 20% stake for about $1.7 billion. MUFG has considered sweetening its offer, people familiar with the matter said.
As Japanese lenders such as MUFG and Sumitomo Mitsui Financial Group struggle with sluggish growth at home, they have been looking for deals in Asia to boost revenue while expanding their investment banking businesses.
