Sumitomo Trust & Banking acquires 98.55% stake in Nikko Asset Management

The Sumitomo Trust & Banking Co., Ltd., a financial services company, has acquired a 98.55% stake in Nikko Asset Management Co., Ltd., an asset management company, from Citigroup, Inc. and other investors. Both Sumitomo Trust and Nikko Asset Management are based in Japan.

Citigroup is a US-based diversified financial services company.

Announcement (July 30, 2009):

Sumitomo Trust has reached a definitive agreement to acquire approximately 98.55% stake in Nikko Asset Management from Citigroup and other investors. The transaction is valued at approximately JPY112,400 million ($1,187.34 million).

Under the terms of the agreement, Citigroup will sell its entire 64% stake in Nikko Asset Management for a cash consideration of JPY75,600 million ($798.61 million).

The transaction is expected to close in the fourth calendar quarter of 2009. The remaining 1.45% stake would be held by Nikko Asset Management employees.

Update on July 29, 2009:

Sumitomo Trust has denied the media reports that the company has reached a basic agreement regarding the acquisition of Nikko Asset Management from Citigroup.

Earlier, today, according to Bloomberg, the Nikkei reported that Sumitomo Trust has agreed to acquire Nikko Asset Management from Citigroup for a consideration of approximately JPY100,000 million ($1,054.84 million).

The transaction is expected to close in October 2009.

Rumor (June 16, 2009):

According to Bloomberg, Nikkei English news reported that Sumitomo Trust has emerged as a potential bidder in the second round of bidding for Citigroup's Nikko Asset Management.

Reportedly, Sumitomo Mitsui Financial Group, Inc., Mizuho Financial Group, Inc., Nomura Holdings, Inc., and T&D Holdings, Inc. have also reached the second round of bidding for Nikko Asset Management.

Institutional Clients Group is acting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Citigroup. UBS Investment Bank is acting as financial advisor to Sumitomo Trust on this transaction.

Deal Value (US$ Million) 1187.34
Deal Type                Acquisition
Sub-Category             Majority Acquisition
Deal Status              Completed: 2009-10-01

Deal Participants

Acquirer (Company) The Sumitomo Trust & Banking Co., Ltd.
Vendor 1 (Company) Citigroup, Inc.
Vendor 2 (Company) Undisclosed Vendors

Deal Rationale

The sale of Nikko Asset Management is part of Citigroup's move to raise funds through asset disposals and restructuring of its business. The transaction would allow Sumitomo Trust to provide value-added investment products and services to its clients and further strengthen its group-wide core asset management business.

% Acquisition 98.55%

Related terms: acquisition, advisor, banking, business, financial services, investment, investment bank, japan, legal, nikkei, products, restructuring