Expanded Global Strategic Alliance Between SMBC Group and Jefferies Significantly Strengthened
Sumitomo Mitsui Financial Group, Inc. (SMFG) and Jefferies Financial Group, Inc. have announced a significant expansion of their Global Strategic Alliance. The partnership aims to strengthen their positions in the financial market and provide superior services to clients worldwide.
Based in Japan, SMFG is one of the largest financial institutions, offering a diverse range of financial services, including commercial banking, leasing, securities, credit card, consumer finance, and other services. With consolidated total assets totalling 264 trillion Yen as of December 31, 2022, SMFG's extensive resources will undoubtedly contribute to the alliance's success.
On the other hand, Jefferies Financial Group Inc. is a leading global full-service investment banking and capital markets firm, offering insights and expertise to investors, companies, and governments with more than 40 offices around the world. The firm's leading global equities business will integrate with SMFG's operations, particularly in Japan.
The alliance will see Sumitomo Mitsui Banking Corporation (SMBC) and Jefferies establish a joint venture, SMBC Nikko Jefferies Securities, to combine their Japanese equities and ECM businesses. This joint venture is expected to commence operations in January 2027 and will focus on becoming the leading provider in wholesale equities and equity capital markets in Japan.
SMBC Group will provide Jefferies with approximately $2.5 billion in new credit facilities to support the joint venture's growth. The partnership will also expand joint coverage of larger sponsors and implement joint origination, underwriting, and execution of syndicated leveraged finance in EMEA (Europe, the Middle East, and Africa).
In terms of equity ownership, SMBC Group intends to increase its stake in Jefferies to up to 20%. Jefferies Financial Group, Inc. intends to file relevant materials with the Securities and Exchange Commission (SEC) regarding a Shareholder Approval, and investors and shareholders are urged to read all relevant documents, including Jefferies' proxy statement (if and when available), as they contain important information about the proposed amended and restated certificate of incorporation.
Jefferies and its directors, executive officers, and other members of management and employees may be deemed to be "participants" in the solicitation of proxies from shareholders of Jefferies in favor of a Shareholder Approval.
The new joint venture in Japan will begin serving clients in January 2027. With this strategic alliance, both SMFG and Jefferies aim to create a formidable presence in the global financial market and deliver exceptional value to their clients.
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