MUFG to buy 10-20% of Morgan Stanley's shares for 900 bil. yen+

TOKYO, Sept. 22 Kyodo - Mitsubishi UFJ Financial Group Inc. said Monday it has reached an agreement to acquire between 10 to 20 percent of common shares in the second-largest U.S. brokerage, Morgan Stanley.

Based on Morgan Stanley's share prices in late August, company sources said the
largest Japanese banking group is likely to invest up to around 900 billion
yen. It may also become the Wall Street firm's largest shareholder if it buys
20 percent of the shares.
Morgan Stanley hopes to boost its capital as it struggles to remain afloat amid
speculation of additional subprime-linked losses.
On Sunday, the U.S. investment bank said it will become a bank holding company
to gain access to ample liquidity to weather a U.S.-triggered financial crisis,
which has led to the recent collapse of Lehman Brothers Holdings Inc. and the
sale of Merrill Lynch & Co. to Bank of America.
As part of the agreement, MUFG also plans to dispatch at least one member to
Morgan Stanley's board, marking a fresh bold move by relatively healthy
Japanese financial institutions to enter the embattled U.S. financial sector.
MUFG will now gain a foothold in both investment and commercial banking in the
United States since its banking arm, the Bank of Tokyo-Mitsubishi UFJ, is also
preparing to take over its U.S. unit UnionBanCal Corp. for an estimated cost of
$3.5 billion.
Other Japanese rivals are also gearing up for overseas business.
Sumitomo Mitsui Banking Corp., a banking unit of Sumitomo Mitsui Financial
Group Inc., has said it will acquire a 2 percent stake in British bank Barclays
Plc for around 500 million pounds ($985 million). Mizuho Corporate Bank, a unit
of Mizuho Financial Group Inc., also funneled $1.2 billion into the capital
base of Merrill Lynch & Co. in January.