Citi to Acquire Rest of Nikko; List on Tokyo Exchange

Citigroup and Nikko Cordial announced they have reached an agreement for Citi to acquire the remaining 32% stake of Nikko it doesn't already own, via a share exchange valued at ¥530 billion ($4.6B). The share exchange is expected to occur in January 2008, with each Nikko share valued at ¥1,700, but possibly higher or lower due to fluctuations in Citi's share price and the dollar-yen forex rate. Ordinary shares of Nikko Cordial rose 1.2% to ¥1,462, ahead of the announcement. Nikko will become a part of Citigroup Japan Holdings Ltd. In a press release, Citi said it plans to list on the Tokyo Stock Exchange, and aims to have the listing effective before the Nikko share swap. Citi said it expects the acquisition of the rest of Nikko to be neutral to EPS in 2008 and accretive thereafter. Citi has been acquiring shares of Nikko since March and notes 100% ownership will create synergies, broaden product offerings and leverage experience, among other perceived benefits. Citigroup gained 2.3% to $47.72 on Monday, despite warning it expects a 60% decline in Q3 profit. (See full story).

Sources: Press release, MarketWatch
Commentary: Citigroup Clinches Key Stake in Nikko Cordial • Why I'm Holding Onto Nikko Cordial • Citigroup to List on Tokyo Exchange ASAP
Stocks/ETFs to watch: C, NIKOY.PK

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