Jefferies gets boost as Japan's SMFG expands partnership, investment
Reuters
Published Apr 27, 2023 08:16AM ET
Updated Apr 27, 2023 12:11PM ET
By Jaiveer Shekhawat and Lananh Nguyen
(Reuters) -Jefferies Financial Group Inc shares surged more than 5% on Thursday after Japan's Sumitomo Mitsui (NYSE:SMFG) Banking Corp (SMBC) said it will combine its U.S. equity and M&A business with the U.S. investment bank.
As part of a deal, SMBC's parent, Sumitomo Mitsui Financial Group , will expand its U.S. presence and boost its stake in Jefferies from 4.5% to as much as 15%, the companies said in a joint statement Thursday.
"This will give us access to more, and larger, public companies," Jefferies President Brian Friedman told Reuters. "This is hugely strategic and deeply long-term."
The deal gives SMFG the right to nominate a member of Jefferies' board of directors. It expands collaboration between SMBC and Jefferies, which have worked together on cross-border mergers and acquisitions, healthcare and leveraged finance since 2021.
The transaction will enable Jefferies to offer more lending capabilities, with the help of SMFG's balance sheet, alongside its traditional advisory work.
SMFG has long been eager to crack the U.S. and other major overseas capital markets. Its SMBC Nikko Securities unit, formerly Citigroup Inc (NYSE:C)'s Japanese broker and a key investment banking unit that SMFG bought in 2009, has a limited footprint abroad.
SMFG's bigger domestic rival, Mitsubishi UFJ (NYSE:MUFG) Financial Group Inc, has boosted its U.S. presence through a $9 billion investment in Morgan Stanley (NYSE:MS) in 2008, which gave MUFG some 20% ownership of the Wall Street bank.
The Financial Times first reported the news on SMBC and Jefferies.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.