Following the settlement of the tender offer for approximately $7.7 billion in cash on May 9, 2007, Citi will own a total ownership stake in excess of 60%.
The successful completion of the tender underscores our focus on seizing opportunities to grow internationally both organically and through targeted acquisitions, commented Charles Prince, chairman and CEO of Citi. The combination of Nikko’s local expertise, deep talent pool, strong brand, and extensive countrywide distribution network with Citi’s global reach and innovative products and services will benefit our clients and help drive future growth of both franchises.
According to analysts cited by the BBC, the deal will be strategically beneficial for both parties. At present, Citi holds a relatively weak position in Japan. However, the acquisition will provide the group with a stronger foothold in the Japanese market, while Nikko will benefit from Citi’s global resources.
The US financial services provider launched its bid for Japan’s third largest brokerage firm last year after Nikko was found guilty of an accounting scandal.
For Citi, the transaction is expected to be neutral to earnings per share in 2007 and accretive in 2008 and thereafter.
