ACOM

TOKYO, Sept 8 (Reuters) - Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) said it would pay $1.4 billion to more than double its stake in consumer loan affiliate Acom (8572.T: Quote, Profile, Research, Stock Buzz) to 40 percent, as Japan's largest bank looks to strengthen its position in the struggling consumer finance market.

Mitsubishi UFJ said it will also fold a smaller unlisted consumer loan unit, DC Cash One, into Acom.

Japan's once mighty moneylenders have been hit by regulations lowering their maximum interest rates, while courts have forced them to repay interest charges now considered illegally high.

Although the stricter regulation has hurt profitability, some Japanese banks see the turmoil in the sector as an opportunity to take market share.

Mitsubishi UFJ said in a statement that it will pay 152.6 billion yen ($1.4 billion) to lift its share in Acom to 40 percent from 15 percent.

The bank said it will offer 4000 yen per share, a 28 premium to Monday's closing price of 3,130 yen. Shares in Acom have gained about 10 percent in the last eight trading sessions on reports that MUFG would raise its holding.

With a market capitalisation of about $4.5 billion and 1.3 trillion yen in outstanding loans, Acom is Japan's largest moneylender by both market size and loans. (Reporting by David Dolan; Editing by Edwina Gibbs)