Japan’s Mitsubishi UFJ Financial Group (MUFG) has agreed to acquire Singaporean investment firm Temasek’s 73.8% stake in Bank Danamon Indonesia.

The transaction will be executed in three stages, with the first involving an acquisition of a 19.9% stake for IDR15.875 trillion ($1.17m). This phase is expected to be completed within a few days.

Under the second phase, MUFG will purchase a further 20.1% stake in Danamon to boost its overall stake in the Indonesian bank to 40%. This phase is expected to be completed between the second and third quarter of 2018, subject to regulatory approvals.

In the final phase, MUFG will seek relevant approvals to raise its stake in Danamon beyond 40%. MUFG’s stake in Danamon will increase to over 73.8% after completion of this stage.

MUFG CEO for Asia & Oceania region Takayoshi Futae said: “Danamon is a well-respected institution in the local banking sector, renowned for its experienced and capable management team, sound business platform and profitable franchise, and would make a very welcome and strategic addition to the MUFG group as we press on with our regional strategy.

“We are supportive of the leadership of Danamon’s management, and are confident that our future collaboration will create synergies that would allow us to better serve customers and shareholders and enhance our mutual growth.”