MUFG Bank and its subsidiary Adira Dinamika Multi Finance have agreed to acquire an 80.6% stake in Indonesia-based Mandala Multifinance in a deal worth IDR7,042bn ($470m).
The stake will be acquired from Jayamandiri Gemasejati and certain other shareholders.
MUFG Bank is a subsidiary of Japan-based Mitsubishi UFJ Financial Group (MUFG).
Following the closing of the deal, MUFG Bank will become the largest shareholder in Mandala Multifinance with an interest of 70.6% while the remaining stake of 10% will be held by Adira Dinamika Multi Finance.
Established in 1997, Mandala Multifinance which primarily offers auto loans for new motorbikes and multi-purpose loans secured by motorbikes in the Indonesian market.
The company also offers consumer goods loan products mainly to the unbanked and underbanked population of Indonesia.
Mandala Multifinance is said to have served more than nine million customers since its inception.
Upon the completion of the transaction, MUFG Bank expects to carry out a mandatory tender offer, as per the applicable regulations in Indonesia, for the remaining 19.4% stake in the Indonesian company.
Through the acquisition of Mandala Multifinance, MUFG Bank and Adira Dinamika Multi Finance aim to utilise the former’s capabilities in both products and geography to bolster and expand their auto loan business in Indonesia.
Subject to the receipt of approvals from the regulatory authorities, the transaction is anticipated to be complete by early 2024.
In December 2022, Akulaku, a Southeast Asian banking and digital finance platform, secured a $200m investment from MUFG Bank.
MUFG Bank’s investment was expected to support the fintech platform’s growth as it aims to offer banking services throughout Southeast Asia with a focus on underserved markets and customers.
