Memorandum of Understanding on the Merger between SMBC Nikko Securities and SMBC Friend Securities(1/1)
Sumitomo
Mitsui Financial Group, Inc.
Sumitomo
Mitsui Banking Corporation
SMBC
Nikko Securities Inc.
SMBC
Friend Securities Co., Ltd.
Memorandum
of Understanding on the Merger between SMBC Nikko Securities and SMBC Friend
Securities
Tokyo, May 12, 2016 --- Sumitomo Mitsui Financial Group, Inc. (SMFG, President:
Koichi Miyata), Sumitomo
Mitsui Banking Corporation (SMBC, President and CEO: Takeshi Kunibe), SMBC
Nikko Securities Inc. (SMBC Nikko, President and CEO: Yoshihiko Shimizu) and SMBC
Friend Securities Co., Ltd. (SMBC Friend, President: Koichi Danno, and together
with SMBC Nikko, the gTwo Securities Companiesh) hereby announce that they have
approved, in principle, at their respective meetings of the board of directors held
today, the basic policies for conducting a merger of SMBC Nikko and SMBC Friend
(the gMergerh) subject to approvals and authorizations from the relevant
authorities, and they have entered into a memorandum of understanding (the gMoUh)
in order to proceed with further considerations and discussions regarding the Merger.
1. Background and Objectives of the Merger
SMFG has been making group-wide efforts to strengthen the SMFG groupfs securities
businesses, including the commencement of a securities brokerage business at
SMBC in December 2004 with SMBC Friend as the consignor (such business was transferred
to SMBC Nikko in January 2011), the conversion of SMBC Friend into a wholly
owned subsidiary of SMFG in June 2006, and the acquisition of SMBC Nikkofs
business in October 2009.
Currently,
due to the slowdown in the emerging economies and the plunge of commodity prices
coupled with the increase in geopolitical risks, the global economy is in a
period of heightened uncertainty and the volatility of the global securities
market and financial market has risen.
However, the importance of the securities businesses within the SMFG group
has dramatically increased. In the wholesale sector, the fundraising through
capital markets have continued to diversify and restructurings through M&A
have rapidly increased, and in the retail sector, the trend of gfrom savings to
investmenth is gaining greater momentum.
Through
discussions among the four companies, SMFG, SMBC, SMBC Nikko and SMBC Friend, and
considering the above circumstances, it was decided that a further strengthening
of the groupfs securities businesses through the merger of the Two Securities Companies
is essential to improve competitiveness of the group. The Merger will fundamentally
strengthen the competitiveness by taking full advantage of synergies from the
Merger while capitalizing on the strengths of each of the Two Securities Companies.
Specifically,
it is contemplated that the Merger will result in: (1) improved customer
satisfaction as a result of the increased product offering and product-related research,
the enhancement of sales channels, and the reinforcement of consulting type
sales, (2) enhancement of productivity through the optimization of sales
personnel staffing as well as the improvement of employee motivation from strengthening
of competitiveness and better industry positioning, (3) streamlining of corporate
management units which will allow to achieve cost saving synergies resulting
from the consolidation of management infrastructure such as overlapping
functions, systems, sales channels and others.
In
order to realize the synergies from an earlier stage, the implementation of personnel
secondments and the supply of certain SMBC Nikkofs products to SMBC Friend will
be considered prior to the Merger.
2. Outline of the Merger
(1) Contemplated Schedule for the Merger
Approval of the MoU by the relevant boards of directors May 12, 2016
Execution of the MoU May
12, 2016
Execution of the merger agreement In
the first half of fiscal year 2016
(tentative)
Effective date of the Merger January
2018 (tentative)
(2) Structure of the Merger
Upon completion of the Merger, SMBC Nikko will be the surviving company
and SMBC Friend will be the absorbed company. Prior to the Merger, in October 2016, SMBC
Nikko will become a wholly owned direct subsidiary of SMFG.
(3) Summary of the Merged Company
(tentative)
Company name: SMBC
Nikko Securities Inc.
Capital relationship: Wholly
owned subsidiary of SMFG
Location of the head office: 3-1,
Marunouchi 3-chome, Chiyoda-ku, Tokyo
(Currently,
the location of SMBC Nikkofs head office)
Business
Profile: Securities
services
(4) Preparations
for the Merger
In order to
facilitate preparations for the Merger, the gMerger Preparation Committeeh will
be established. Sub-committees to be
established under the Merger Preparation Committee will conduct individual
merger preparations such as front office functions, planning, personnel, office
work, system, risk management and compliance and others.
3. Outlook
Details of the impact of the Merger on business results will be
announced, where necessary, after the details of the Merger are determined.
[Corporate Profile of the Companies to be
merged]
(As of the end of March 2016)
(1) Company Name |
SMBC Nikko Securities Inc. |
SMBC Friend Securities Co., Ltd. |
(2) Location of Head Office |
3-1,
Marunouchi 3-chome, Chiyoda-ku, Tokyo |
7-12, Nihonbashi-Kabutocho, Chuo-ku, Tokyo |
(3) Title and Name of Representative |
Yoshihiko Shimizu, President and CEO |
Koichi Danno, President |
(4) Business Profile |
Securities services |
Securities services |
(5) Establishment |
June 15, 2009 |
March 2, 1948 |
(6) Fiscal Year End |
March |
March |
(7) Total Assets (Consolidated) |
10,479,163 million yen |
306,558 million yen |
(8) Net Assets (Consolidated) |
697,808 million yen |
221,353 million yen |
(9) Number of Employees |
8,944 |
1,890 |
(10) Number of Branches |
123 branches |
61 branches (58 branches, 3 satellites) |
End.