Japan: Ups and downs in bank sector M&A

The closing months of 2007 are proving to be full of intrigue for watchers of the Japanese banking industry, with the year’s two biggest M&A deals experiencing setbacks while smaller banks look to forge new alliances.

Citi’s acquisition of the remaining stock in broker Nikko Cordial threatens to create a powerful alliance between the US group’s global reach and experience, and the Japanese firm’s local distribution network. Citi is using its own shares to buy Nikko Cordial in a stock swap but those shares have declined so sharply in value in the past few months (down from $50 in September to $31 now) that the terms of the agreement have been revised.