ID :
58593
Fri, 05/01/2009 - 23:59
Auther :
Shortlink :
https://oananews.org//node/58593
The shortlink copeid
SMFG to buy Nikko Cordial, bulk of Nikko Citigroup for 545 bil. yen
TOKYO, May 1 Kyodo -
Sumitomo Mitsui Financial Group Inc. has reached an agreement with Citigroup
Inc. to acquire Nikko Cordial Securities Inc. and part of Nikko Citigroup Ltd.
for 545 billion yen, and the two financial groups will form a business
alliance, the two parties said Friday.
The deal would mark the first realignment of the Japanese financial industry
involving acquisition of one of Japan's top three brokerage houses by a major
domestic bank.
By acquiring Nikko Cordial, Japan's third-largest brokerage house, and the bulk
of Nikko Citigroup, Citi's investment banking unit, SMFG is expected to have
the largest deposit assets in brokerage operations among Japanese megabanks.
SMFG currently has a midsize brokerage house, SMBC Friend Securities Co., and
it also jointly owns Daiwa Securities SMBC Co., a brokerage firm specializing
in services for corporate clients, with Daiwa Securities Group.
''We're really delighted to have such a strong (partner),'' SMFG President
Teisuke Kitayama said at a press conference in Tokyo in announcing the first
integration between a major Japanese bank and one of the nation's top brokerage
houses.
''We believe this deal will mark one of the turning points from the aspect of
the evolution of Japan's financial business model,'' he said.
Stephen Volk, Citigroup vice chairman, said at the same press conference that
the deal is important for the U.S. financial group in realizing its
restructuring strategy announced in January in the face of its mounting losses
amid the global financial crisis.
Despite the sale of Nikko, Volk said, ''We remain committed to our businesses
in Japan where we have over a century of experience.''
The acquisition is scheduled to take place Oct. 1, by setting up a new company
that will inherit the two Nikko companies, SMFG and Citigroup said.
Through the deal, SMFG aims to strengthen its retail customer base and obtain
connections with about 700 listed companies to which Nikko serves as a leading
manager. SMFG will continue to use ''Nikko'' brand name after the acquisition.
Part of Nikko Citigroup may be integrated with Daiwa SMBC as a way to
consolidate operations targeting corporate clients, Sumitomo Mitsui Banking
Corp. President Masayuki Oku said at the same press conference.
As part of the agreement, SMFG and Citigroup will also form an alliance in
corporate banking and investment banking operations.
SMBC was given preferential negotiating rights to buy Nikko after it reportedly
outbid its rivals, Japan's two other major banking groups Mitsubishi UFJ
Financial Group Inc. and Mizuho Financial Group Inc.
Nikko Cordial, which came under the Citigroup's umbrella in 2007, has a sales
network of about 110 outlets in Japan and has strength in wealthy-class
clients.
Under the deal, the transaction is to leave Citigroup with about 200 billion
yen of cash derived either through the retention of excess cash in Nikko
Cordial or repayment of its outstanding indebtedness to Citigroup.
Nikko Cordial and Nikko Citigroup reported combined operating revenues of 242.1
billion yen and a net loss of 14.6 billion yen in the year that ended in March.
==Kyodo
Sumitomo Mitsui Financial Group Inc. has reached an agreement with Citigroup
Inc. to acquire Nikko Cordial Securities Inc. and part of Nikko Citigroup Ltd.
for 545 billion yen, and the two financial groups will form a business
alliance, the two parties said Friday.
The deal would mark the first realignment of the Japanese financial industry
involving acquisition of one of Japan's top three brokerage houses by a major
domestic bank.
By acquiring Nikko Cordial, Japan's third-largest brokerage house, and the bulk
of Nikko Citigroup, Citi's investment banking unit, SMFG is expected to have
the largest deposit assets in brokerage operations among Japanese megabanks.
SMFG currently has a midsize brokerage house, SMBC Friend Securities Co., and
it also jointly owns Daiwa Securities SMBC Co., a brokerage firm specializing
in services for corporate clients, with Daiwa Securities Group.
''We're really delighted to have such a strong (partner),'' SMFG President
Teisuke Kitayama said at a press conference in Tokyo in announcing the first
integration between a major Japanese bank and one of the nation's top brokerage
houses.
''We believe this deal will mark one of the turning points from the aspect of
the evolution of Japan's financial business model,'' he said.
Stephen Volk, Citigroup vice chairman, said at the same press conference that
the deal is important for the U.S. financial group in realizing its
restructuring strategy announced in January in the face of its mounting losses
amid the global financial crisis.
Despite the sale of Nikko, Volk said, ''We remain committed to our businesses
in Japan where we have over a century of experience.''
The acquisition is scheduled to take place Oct. 1, by setting up a new company
that will inherit the two Nikko companies, SMFG and Citigroup said.
Through the deal, SMFG aims to strengthen its retail customer base and obtain
connections with about 700 listed companies to which Nikko serves as a leading
manager. SMFG will continue to use ''Nikko'' brand name after the acquisition.
Part of Nikko Citigroup may be integrated with Daiwa SMBC as a way to
consolidate operations targeting corporate clients, Sumitomo Mitsui Banking
Corp. President Masayuki Oku said at the same press conference.
As part of the agreement, SMFG and Citigroup will also form an alliance in
corporate banking and investment banking operations.
SMBC was given preferential negotiating rights to buy Nikko after it reportedly
outbid its rivals, Japan's two other major banking groups Mitsubishi UFJ
Financial Group Inc. and Mizuho Financial Group Inc.
Nikko Cordial, which came under the Citigroup's umbrella in 2007, has a sales
network of about 110 outlets in Japan and has strength in wealthy-class
clients.
Under the deal, the transaction is to leave Citigroup with about 200 billion
yen of cash derived either through the retention of excess cash in Nikko
Cordial or repayment of its outstanding indebtedness to Citigroup.
Nikko Cordial and Nikko Citigroup reported combined operating revenues of 242.1
billion yen and a net loss of 14.6 billion yen in the year that ended in March.
==Kyodo