Japan’s Sumitomo Mitsui Banking Corp (SMBC) said it will combine its US equity and merger and acquistion (M&A) business with Jefferies Financial Group as part of a deal in which its parent, Sumitomo Mitsui Financial Group (SMFG), will boost its stake in the US firm and its presence in the country.

SMFG will raise its stake in Jefferies from 4.5 per cent currently to as much as 15 per cent, giving it the right to nominate a member to the US company’s board of directors, the companies said in a joint statement on Thursday (Apr 27).

The deal is part of a broader collaboration between SMBC and Jefferies who have been working together on cross-border M&As, healthcare and leveraged finance since 2021.

SMFG has long been eager to crack the US and other major overseas capital markets. Its SMBC Nikko Securities unit, formerly Citigroup’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 Financial Group (MUFG), has boosted its US presence through a US$9 billion investment in Morgan Stanley in 2008, which gave MUFG some 20 per cent ownership of the Wall Street bank.

The Financial Times newspaer first reported the news on SMBC and Jefferies. Reuters

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