Mitsubishi UFJ Financial Group Inc.’s (MUFG) plans to acquire a stake in HDFC Bank Ltd.’s consumer lending arm, HDB Financial Services Ltd., have hit a snag due to disagreements over the Japanese lender’s influence on business strategy, according to Bloomberg.
Earlier this year, MUFG was reportedly eyeing a 20% stake in HDBF for approximately US$1.7 billion.
Sources familiar with the matter revealed that while MUFG remains interested in HDB Financial Services, the ongoing negotiations may be delayed or even collapse due to these differences.
An alternative for HDFC could be an initial public offering of the consumer lending unit.
The sticking point appears to be the extent of control MUFG would have over HDBF’s strategy, with no final decisions made as of yet.
Negotiations could potentially resume if MUFG is offered greater say in decision-making.
MUFG’s pursuit of this deal reflects a broader strategy to expand its presence in India, where HDB Financial Services offers a range of services including personal, gold, and auto loans.
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