JAPAN - Sumitomo Trust and Banking Co. has announced plans to buy Citigroup's Japanese asset management arm, Nikko Asset Management, for JPY112.4bn (US$1.2bn).
Sumitomo said in a release it expects the deal to close on October 1, 2009.
The combined firm will have JPY34.5trn in assets under management, with JPY8.8trn coming from the Nikko unit. Sumitomo runs JPY25.7trn mainly for private pension funds, public schemes and international institutional investors.
In June, a report of the Japanese asset management industry showed Sumitomo had edged out Barclays Global Investors as Japan's largest asset manager, potentially because of government wins from the Government Pension Investment Fund. (Global Pensions; June 22, 3009)
Nikko's business is mainly retail and the firm has established distribution relationships with 90% of the country's regional banks, Sumitomo said.
Citigroup has been shedding its Japanese businesses as it looks to recover from the credit crisis.
Citi chief executive Vikram Pandit said: "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."
He added: "We remain committed to Japan, where we have proudly served clients for more than a century. We can now shift our focus from reshaping our franchise in this very important market to building our core businesses and better serving clients."
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