Resona Holdings, the bank holding company of Resona Bank, has agreed to take full control of regional lender Kansai Mirai Financial Group (KMFG).
Under the agreement, Resona will pay up to JPY66.1bn ($630m) to buy Kansai Mirai, Reuters reported.
Go deeper with GlobalData
Resona, through a tender offer bid (TOB) and a stock swap, will acquire the 49% stake in Kansai Mirai it did not own before.
According to the TOB, the bank will pay JPY500 ($4.76) for each share of Kansai Mirai.
This represents a 23.46% premium from its closing price on 9 November, the report added.
However, if KMFG shareholders do not accept the tender offer, Resona will offer 1.42 Resona shares in exchange for each Kansai Mirai share.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe transaction will be conducted from 11 November to 9 December 2020, the bank said in a statement.
If the transaction is successfully completed, KMFG will be delisted from the Tokyo Stock Exchange (TSE) in March 2021.
As a result of this deal, KMFG will become a wholly-owned subsidiary of Resona Holdings.
At a news briefing, Resona president Masahiro Minami said: “We are facing an unprecedented business environment and need to prepare for a long-term battle after the coronavirus pandemic.”
Currently, Tokyo-based banking group Sumitomo Mitsui Financial Group (SMFG) owns 23.5% of Kansai Mirai.
Resona said that SMFG has agreed to offload the entire stake via the tender offer and stock exchange.
The move comes after Bank of Japan (BOJ), the country’s central bank, decided to reward regional banks for agreeing to consolidate or slash costs, under a new scheme.
It is providing an extra 0.1% interest on deposits to banks with approved restructuring plans.
Japan’s prime minister Yoshihide Suga also pledged to encourage regional banks to consolidate and strengthen local economies, the Reuters report added.
