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Business deals

MUFG drops aircraft management buyout after US headwinds

Regulatory hurdles block deal with Germany's DZ Bank

Old airplanes are stored in the desert in Victorville, California.   © Reuters

TOKYO -- Top Japanese bank Mitsubishi UFJ Financial Group has abandoned plans to acquire aircraft investment operations from DZ Bank following what the major German lender calls "inextricable regulatory restrictions" in the U.S.

DZ Bank unit DVB Bank agreed in March 2019 to sell its aviation finance division to MUFG. That November, the two sides completed the transfer of the client lending portfolio, valued at about 4 billion euros ($4.7 billion).

MUFG was also due to acquire DVB's aviation investment management and asset management businesses, but that transfer did not win approval from authorities in the U.S.

Information and expertise gained from this leg of the deal would have upgraded MUFG's aviation-financing business. Now the group finds itself reworking the strategy.

The DZ Bank deal expanded MUFG's aircraft-financing business to emerging markets and used aircraft from an earlier focus on developed countries.

The decision to halt the acquisition partway through will have no direct impact on MUFG's finances.

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