SBI ties up with MUFG Bank to finance M&A, aviation and real estate deals

Mumbai: State Bank of India has entered into a strategic partnership with MUFG Bank to collaborate on financing mergers and acquisitions, aviation and real estate projects to support Indian and global customers, it said in a joint statement on Wednesday.

The deal comes after the Reserve Bank of India on February 13 issued final guidance for banks to finance mergers and acquisitions, a major regulatory change that is expected to boost deal financing by domestic lenders. Under the new rules, banks can fund up to 75 per cent of the total value of a deal, but must ensure their total loans for such acquisitions do not exceed 20 per cent of their capital.

This agreement is significant as it deepens India-Japan financial ties and supports cross-border corporate activities. “By synergizing SBI’s unique domestic reach as a national banking champion with MUFG’s leading international footprint, the partnership will serve as a vital bridge for investment flows and industrial collaboration between two of the largest global economies,” said SBI deputy managing director Kishore Kumar Poludasu.

Through their partnership, SBI and MUFG will explore opportunities in structuring and financing transactions in sectors such as M&A, aviation and real estate, and will also collaborate on M&A advisory, trade finance and retail banking solutions. The collaboration will also support Japanese companies expanding their operations in India and Indian companies looking to expand in overseas markets, including Japan.

“Both banks will help facilitate the introduction of Indian mid-sized companies and micro, small and medium enterprises (MSMEs) to Japanese corporate clients and identify financing opportunities that deepen collaboration at the transaction level,” the statement said.

synergy

This merger combines SBI’s extensive domestic banking network with MUFG’s global reach and expertise in cross-border financial structuring, allowing both institutions to facilitate capital flows between the two countries.

“Alongside the growing global ambition of Indian businesses, we are witnessing a strong momentum in Japanese companies expanding their presence in India,” said Takuya Senoo, MUFG’s regional manager for India and Sri Lanka.

He added that MUFG, through its partnership with SBI, aims to provide integrated cross-border solutions that support both inbound investment into India and outward expansion of Indian companies.

On February 20, SBI chairman CS Setty told reporters on the sidelines of an IBA event in Mumbai that SBI was in talks with Japanese lenders for a partnership in acquisition finance business and that SBI ₹94,000 crore to borrowers considering acquisition financing, according to a report by Press Trust of India.