Citigroup takes full control of Japan's Nikko Cordial
Citigroup said Tuesday that it had completed its move to take full control of Japanese brokerage house Nikko Cordial Corp., overcoming hurdles from financial difficulties at the US financial powerhouse.
Nikko Cordial has become a fully-owned subsidiary of Citigroup's Japanese arm after the completion of a $4.8-billion share swap, a company statement said.
Citigroup's top executive in Japan, Douglas Peterson, will become president and chief executive of Nikko Cordial, while Shoji Kuwashima will move down to vice chairman and also join the board of Citigroup Japan Holdings.
Citigroup's multi-billion-dollar move on Japan's third-largest brokerage is the latest bid by a foreign company to try to make a major push into the world's second largest economy after the failure of rival Merrill Lynch.
Nikko Cordial Corp. shareholders received 0.602 shares in Citigroup Inc, which had already held a stake of about 68 per cent in Nikko Cordial after a massive earlier takeover offer for its Japanese partner, which was reeling from a fraud scandal.
The move to take full control follows a loosening of takeover rules earlier this year allowing foreign companies to acquire Japanese companies through a subsidiary using shares in the parent company rather than cash.
Citigroup has been beleaguered by losses from the US subprime crisis, in which high-risk customers are defaulting on housing loans. The group was forced to tweak the terms of the Nikko Cordial deal in November after its shares plunged.
Citigroup chief Charles Prince resigned in early November to take responsibility for the group's poor performance in the subprime mortgage crisis. (AFP)
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