Japanese bank seeks link-up with Citi

27 February 2007

Japanese bank Mizuho has dropped plans to buy securities firm Nikko Cordial in favor of striking a deal with US banking giant Citigroup, according to unnamed Nikko sources.

The deal would see Mizuho, the second largest bank in Japan and ranked fifth for takeover advice last year, unite with its rival bidder for the scandal-hit Nikko.

It is thought that Mizuho perceives that a deal with Citigroup would enable them to better compete with US companies for advising on takeover deals, of which there were four times as many last year as there were in 2005.

Commenting on the proposal in an interview with Bloomberg, a market analyst with Nomura Keisuke Moriyama, said: "An alliance with Citigroup would be a solid option as they are seeking more mandates and expansion overseas.

"Buying a big stake isn't a priority for Mizuho."

News of Mizuho's intentions comes in the week where there was mounting speculation that Citigroup will extend its share in Nikko from 4.9 per cent o 33.4 per cent.

An investigation into accounting irregularities at Nikko during 2005, led to the resignation of six of the bank's chief executives.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development