Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) (TYO:8306) is set take control of Thailand’s Bank of Ayudhya (OTCMKTS:BKAHF) for 560 billion yen ($5.6 billion), making it the largest banking takeover deal in the South East Asian nation.

Bank Of Ayudhya

Japan’s biggest bank seeks to acquire 75 percent of the fifth-largest bank in Thailand, Bank of Ayudhya (OTCMKTS:BKAHF), by offering 39 Thai bhat ($1.26) for each of their shares in the lender.

The top Japanese bank already got confirmation from GE Capital to sell the latter’s 25 percent stake in Bank of Ayudhya.

Thailand Part Of Fast Growing ASEAN Economy

The proposed deal would enhance the Japanese bank’s footprint in the fast growing Thailand economy. The deal would facilitate Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) (TYO:8306) to a larger platform to expand its retail and corporate banking in South East Asia.

Thailand is part of a fast growing ASEAN economy. While ASEAN nations have been among the fastest growing nations in the world, individual member states lack the power to effectively challenge, and even represent themselves against the super powers.

The wide branch network and strong retail customer base that Bank of Ayudhya (OTCMKTS:BKAHF) possess would gel well with Mitsubishi’s whole sale banking expertise.

Ratanarak Family To Retain 25 Percent Stake In Bank Of Ayudhya

The other major shareholder of Bank of Ayudhya (OTCMKTS:BKAHF), the Ratanarak Group, would retain its existing 25 percent stake, post the proposed deal.

Thailand’s rules cap foreign ownership of local banks at 49 percent. Besides, Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU) (TYO:8306) and Bank of Ayudhya (OTCMKTS:BKAHF) will consider merging the Japanese bank’s Bangkok office into the Thai lender to meet the local rules.

The proposed deal would also be the biggest banking takeover in Asia by a Japanese bank, eclipsing Sumitomo Mitsui Financial Group  Inc. (TYO:8316)’s announcement in May that it will buy a stake in Indonesia’s PT Bank Tabungan Pensiunan Nasional for $1.5 billion.

Over the last several years Thailand has become a favored destination for Foreign Investments, out pacing many of its regional neighbors and helping to spur dramatic GDP growth in the vibrant South East Nation. However, Thailand does offer plenty of opportunity for growth, only smart and well-thought out investments are going to result in substantial profits.