Standard Chartered is close to acquiring a majority stake in Union Bank Limited with a preliminary agreement expected to be signed as early as this week, officials said on Monday.
One source close to talks said Standard Chartered was interested in buying at least 66 percent, which could value a deal at more than $275 million and would make it the biggest foreign acquisition in the country's banking sector.
Another source familiar with the situation said the London-headquartered lender intended to take full ownership of Union Bank, with a mandatory buyout following the initial share purchase.
In May, Standard Chartered began due diligence checks on Union Bank - country's 6th-biggest listed lender with assets of over $2 billion and deposits of around Rs 93 billion ($1.5 billion). A senior official at Union Bank said a sale-purchase agreement (SPA) could be signed soon.
"The buyer has come up with no issues and is now done with the due diligence," the official said. "The next step is signing the SPA, and it can be done as early as this week." A senior Standard Chartered official in Pakistan confirmed the review had been completed but provided no further details.
Neither of the two banks has commented on details of the deal, although Union Bank had said in May its top shareholders were in discussions to sell their stakes in the bank without naming the prospective buyer.
A senior official at the State Bank said the deal was expected to be completed in November. Union Bank's chairman, Saudi investor Abdullah Basodan, is the major shareholder with a 49.06 percent stake as of December 31. But sources said Standard was eyeing a bigger slice.