SMBC to increase equity ownership of Jefferies Financial to up to 20%

Jefferies Financial (JEF), Sumitomo Mitsui (SMFG), Sumitomo Mitsui Banking and SMBC Nikko Securities announced that they are significantly expanding their global strategic alliance. SMBC Group and Jefferies initially entered into a strategic alliance in 2021 to collaborate on future corporate and investment banking business opportunities. In 2023, the alliance was expanded to enhance collaboration across M&A, equity and debt capital markets, with a particular focus on investment grade clients in the U.S. SMBC Group and Jefferies subsequently added memoranda of understanding to expand their alliance to the EMEA region, Canada, Asia and Australia, as well as to expand the scope of joint coverage initiatives to larger global sponsors, pre-IPO companies, and sub-investment grade corporate clients. This will include combining their Japanese equities and ECM businesses, expanding joint coverage of larger sponsors and implementing in EMEA joint origination, underwriting and execution of syndicated leveraged loans for these clients, SMBC agreeing to increase its equity ownership in Jefferies to up to 20% in the open market, SMBC providing Jefferies approximately $2.5B in new credit facilities to support Jefferies and to facilitate collaboration efforts, including EMEA leveraged lending, U.S. pre-IPO lending and asset-backed securitization, subject to receipt of applicable regulatory approvals.