May 1, 2009
FT.com / Citi sells Japanese unit for $7.9bn
Citigroup on Friday sold its Japanese securities business and key investment banking business to Sumitomo Mitsui Financial Group SMFG as part of a deal worth Y774.5bn $7.8nm that will boost the troubled US bank’s capital.
Japan’s third largest bank is paying Y545bn for Citi’s Japanese securities business, which is mainly comprised of Nikko Cordial Securities, and a further Y28.5bn for Japanese-listed securities held by Citi.
Additionally, Citi is to receive Y201bn in cash by either retaining excess cash held in Nikko Cordial or by receiving repayment of debt owned by the Japanese brokerage to Citi.
The acquisition of Nikko Cordial, which catapults SMFG to the top ranks of Japanese securities companies, is a further step in the re-ordering of Japan’s financial landscape.
It follows Mitsubishi UFJ Financial Group’s acquisition of a 21 per cent stake in Morgan Stanley, which resulted in an agreement to merge the two banks’ securities and investment banking operations in Japan.
via FT.com / Companies / Banks – Citi sells Japanese unit for $7.9bn.
zyakaira notes: This brings down capital raising correspondingly. TCE still needs a couple of 20 billion dollars in common equity – Citibank can float
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