Citi announced on October 2 that it would acquire the remaining shares in broker Nikko Cordial that it does not already own to make the company a wholly owned subsidiary. The move marks the first usage by a foreign firm of the new triangular merger legislation, which allows firms to use their shares rather than cash to make acquisitions and which has been available since May after a ban on the practice was rescinded.
The news has striking implications for the Japanese financial system. Most important, the marriage of an international firm of Citi’s size and a local broker with an established retail platform – Citibank has just 30 branches and sub-branches in Japan – creates a sizeable threat...
