Japan's Mizuho Financial Group Inc. and Sumitomo Mitsui Trust Holdings Inc. agreed to merge their units, Trust & Custody Services Bank Ltd. and Japan Trustee Services Bank Ltd., respectively, to create a leading trust bank specializing in asset administration services in the country.
The integration will take place in two steps, with the units first implementing a joint share transfer to incorporate an intermediate holding company named JTC Holdings Ltd. on Oct. 1. JTC Holdings will then issue shares to the units' existing shareholders on the basis of 1.02 shares in the company for every share in Trust & Custody Services Bank and 1 share for every share in Japan Trustee Services Bank, the companies said.
Sumitomo Mitsui Trust and Mizuho Financial will hold 33.3% and 27% stakes, respectively, in JTC Holdings. Resona Bank Ltd., Dai-ichi Life Insurance Co. Ltd., Asahi Mutual Life Insurance Co., Meiji Yasuda Life Insurance Co., Japan Post Insurance Co. Ltd. and Fukoku Mutual Life Insurance Co. will also hold stakes in the new company.
In the second stage, JTC Holdings, Trust & Custody Services Bank and Japan Trustee Services Bank will undertake an absorption-type merger around 2021 to form an integrated company. Under the plan, the two trust banks' managerial resources and know-how with respect to asset administration services will be integrated.
Details regarding the integrated company's name and the surviving company will be determined at a later date. The transactions are also subject to obtaining regulatory approvals.
As a result of the integration, Mizuho and Sumitomo Mitsui Trust said Trust & Custody Services Bank and Japan Trustee Services Bank will no longer be their consolidated subsidiaries, respectively. Meanwhile, JTC Holdings will become an equity-method affiliate of both companies.
Mizuho and Sumitomo Mitsui Trust first signed a memorandum of understanding to prepare for a merger of their trust bank units in March 2017.