Singapore's OCBC Bank and its insurance unit are in exclusive talks with Thai tycoon Chareon Sirivadhanabhakdi for a possible sale of their combined stakes in United Engineers to the billionaire's TCC Top Enterprises.

OCBC and Great Eastern Holdings (GEH) entered into an exclusive agreement with TCC to begin discussions for a possible transaction on August 26. The period of exclusivity will expire six weeks from the date TCC begins due diligence on the target company, OCBC and GEH said in a joint statement to the Singapore stock exchange.

OCBC and GEH, together with the bank's founding Lee family, own roughly 34% take in United Engineers. If the transaction happens, it will trigger a mandatory takeover offer for the entire company. Under Singapore's listing rules, a bidder is required to make a mandatory offer if it buys a 30% stake in the target entity.

OCBC, which completed its US$5 billion acquisition of Hong Kong-based Wing Hang Bank, is looking to strengthen its balance sheet post the acquisition. Earlier this month, it announced a rights issue of S$3.37 billion (US$2.7 billion).

Reports earlier indicated that the acquisition could be valued at as much as US$2 billion.

The proposed transaction comes two years after OCBC and GEH agreed to sell their stakes in Fraser & Neave and Asia Pacific Breweries, triggering dramatic multiple bidding wars for the two companies.

Charoen, Thailand's richest man, in the end succeeded in getting hold of both Fraser and Neave as well as Asia Pacific Breweries.