Sumitomo Mitsui Financial Group Inc. and Daiwa Securities Group Inc. agreed to merge their asset management units Sumitomo Mitsui Asset Management Co. Ltd. and Daiwa SB Investments Ltd.
The deal, which create an asset manager with a combined AUM of ¥19.472 trillion as of end-March, comes as both companies are seeking greater economies of scale. The merged company will also leverage Sumitomo Mitsui Asset Management's expertise in providing investment advice primarily to domestic life and nonlife insurers and offering investment trusts to individual clients, as well as Daiwa SB Investment's strengths in targeting domestic and foreign pension funds and corporate clients.
Following the transaction, Sumitomo Mitsui Financial will hold 50.1% of the merged company, while Daiwa Securities will hold a 23.5% stake. Mitsui Sumitomo Insurance Co. Ltd., Sumitomo Life Insurance Co. and Sumitomo Mitsui Trust Bank Ltd. will hold 15.0%, 10.4% and 1.0%, respectively, of the merged company.
The merger agreement was signed May 11, according to a same-day statement. The final contract is expected to be concluded at the end of September, while the merger is planned to complete in April 2019.
The transaction is subject to regulatory approval.
As of May 11, US$1 was equivalent to ¥109.40.