Tokyo/New Delhi: Sumitomo Trust and Banking
Co will acquire Nikko Asset Management, the Japanese asset
management arm of Citigroup, for about 112.4 billion yen.
The acquisition is expected to be complete by October 1,
Sumitomo Trust said in a statement today.
"The Sumitomo Trust and Banking Co has reached an
agreement today with Nikko Citi Holdings Inc and another
shareholder to acquire the shares (up to 98.55 per cent of all
outstanding shares) of Nikko Asset Management Co, subject to
regulatory approvals and permits," the statement said.
Estimated to be worth 112.4 billion yen, the deal would
create one of the largest asset management groups in Japan.
Sumitomo Trust has assets under management worth 25.7 trillion
yen while NikkoAM has 8.8 trillion yen.
"The acquisition of NikkoAM will increase the group`s
total AUM to approximately 34.5 trillion yen, creating one of
the country`s largest asset management groups with a menu of
services that addresses the needs of both institutional
investors and, through sales of investment trusts, personal
investors as well," the statement said.
Nikko Citi Holdings and NAM Holdings have 58.1 per cent
and 37.4 per cent shareholding, respectively, in NikkoAM.
Grappling with the financial turmoil, Citi has been
selling many of its assets worldwide as part of efforts to
shrink the balance sheet.
"With the previously announced sales of our brokerage and
trust banking businesses in Japan, this transaction marks
another milestone in the implementation of our Citicorp/Citi
Holdings strategy," Citi CEO Vikram Pandit said in a separate
"We can now shift our focus from reshaping our franchise
in this very important market to building our core businesses
and better serving clients," Pandit added.
Sumitomo noted that it would support NikkoAM`s plan to
aim for listing aim for listing as one of the largest
independent asset management institutions in Asia.
"Even after the listing of NikkoAM, both Sumitomo Trust
Banking and NikkoAM , as strategic business partners, will
endeavor to further enhance each other’s corporate value," it