Sumitomo Mitsui Financial explores buying larger stake in Jefferies Financial (NYSE:JEF)
Sumitomo Mitsui Financial Corporation (NYSE:SMFG) is considering increasing its stake in Jefferies Financial Group (NYSE:JEF) as the two financial firms expand their alliance beyond the US, Nikkei report early Thursday (Japan time), citing an interview with SMFG President and CEO Jun Ohta.
In July 2021, Sumitomo Mitsui Financial (SMFG) established a partnership with Jefferies (JEF), Include SMFG holds up to 4.9% of the shares into JEF, an equity investment of ~$386 million at the time. SMBC Nikko Securities also provided financing to Jefferies in the form of a $1.65 billion revolving line of credit, a $250 million secondary loan, and a $350 million revolving line of credit.
“We have decided to increase our holdings,” Ohta said, without detailing the size or duration of an additional investment. He said those decisions will be made after the two companies begin negotiations with each other and with US regulators.
Ohta has said that he wants Jefferies to be an equity-based associate, which would require a 20% to 50% stake.
In the spring of 2021, Sumitomo Mitsui Bank (SMFG) has agreed to buy ~250 million dollars of Ares Management (TO BE) securities as part of ARES offering 9.5 million class A shares to the public.