Mitsubishi UFJ Financial Group and Morgan Stanley have signed a memorandum of understanding to form a securities joint venture combining Mitsubishi UFJ Securities Company and Morgan Stanley Japan Securities Company.
Mitsubishi UFJ Financial Group (MUFG) has said that the proposed memorandum of understanding is the first step in a global strategic alliance between the two companies.
MUFG added that the new company to be created through the integration, which will leverage the network of each of MUFG and Morgan Stanley, will aim to become a preeminent company in the Japanese securities industry by appropriately and swiftly addressing the advanced and diverse securities needs of wholesale and retail customers in Japan as well as by offering various Japan-related financial products and services to overseas customers.
The ownership will be 60% for MUFG and 40% for Morgan Stanley and each will have proportional voting rights. The name of the new company will be determined at a future date. MUFG and Morgan Stanley will work to conclude definitive agreements for the integration in the coming months with a targeted closing date prior to the end of March 2010. The integration will be subject to regulatory approval.
Morgan Stanley will appoint the joint venture’s chairman, while MUFG will designate its president and CEO. MUFG will also name a deputy president and CEO of the joint venture’s retail and middle markets business, with managerial responsibility for the venture’s retail and middle markets operations.
Morgan Stanley will appoint a deputy president and CEO of the institutional securities business, with managerial responsibility for the venture’s institutional businesses and for providing connectivity with Morgan Stanley’s global network. MUFG will appoint a deputy head of the institutional securities business. Additional senior management will be drawn from the ranks of both companies.
MUFG and Morgan Stanley have confirmed that their close collaboration with each other and support to the new company are essential to achieve the goal of establishing a preeminent company in the Japanese securities industry, and will discuss details of the integration and the new company to achieve this goal.
Both parties will work to conclude definitive agreements regarding the joint venture in the coming months with a targeted closing date prior to the end of March 2010. The joint venture will be subject to regulatory approval.
In addition to this integration of the securities companies in Japan, MUFG and Morgan Stanley are discussing specific initiatives in other business areas to maximise the strategic benefits of the global alliance, which the companies intend to announce in due course.
Current subsidiaries and affiliates of Mitsubishi UFJ Securities Company and Morgan Stanley Japan Securities Company, will not, in principle, be included in the integration.
