Japan's SMFG boosts U.S. presence via bigger stake in Jefferies

(Reuters) - Japan's Sumitomo Mitsui Banking Corp (SMBC) said it will combine its U.S. equity and M&A business with Jefferies Financial Group Inc as part of a deal in which its parent, Sumitomo Mitsui Financial Group, will boost its stake in the U.S firm and its presence in the country.

Sumitomo Mitsui Financial Group (SMFG) will raise its stake in Jefferies from 4.5% currently to as much as 15%, giving it the right to nominate a member to the U.S. company's board of directors, the companies said in a joint statement on Thursday.

The deal is part of a broader collaboration between SMBC and Jefferies who have been working together on cross-border mergers and acquisitions, healthcare and leveraged finance since 2021.

SMFG has long been eager to crack the U.S. and other major overseas capital markets. Its SMBC Nikko Securities unit, formerly Citigroup Inc's Japanese broker and a key investment banking unit that SMFG bought in 2009, has a limited footprint abroad.

SMFG's bigger domestic rival, Mitsubishi UFJ Financial Group Inc, has boosted its U.S. presence through a $9 billion investment in Morgan Stanley in 2008, which gave MUFG some 20% ownership of the Wall Street bank.

The Financial Times first reported the news on SMBC and Jefferies.

(Reporting by Kanjyik Ghosh, Jaiveer Shekhawat in Bengaluru and Makiko Yamazaki in Tokyo; Editing by Savio D'Souza)