Mitsubishi UFJ Trust and Banking Corp. has announced its plans to acquire Australian data manager Link Administration Holdings Ltd. in a deal valued at approximately A$1.11 billion ($744 million). This move aligns with the trend of Japanese lenders pursuing higher-yield assets overseas.
The banking unit of Japan’s largest bank, Mitsubishi UFJ Financial Group Inc., will offer A$2.10 per share, representing a 23.5% premium to Friday’s closing stock price, as stated in a Monday release from Mitsubishi. Link Administration, in a separate statement, expressed unanimous board support for the transaction. Following this announcement, the stock witnessed a notable surge of 27% to A$2.16 by 10:46 a.m. in Sydney.
This development comes a year after Link Administration faced challenges in reaching agreeable terms with Canada’s Dye & Durham Ltd. for the sale of various parts of its business, valued at A$1.27 billion. This concluded a prolonged period of transaction talks.
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Post the cessation of the previous takeover discussions, Link has been on a path of transformation. The company recently finalized the sale of its UK-based fund solutions unit to the Waystone Group. This move followed a regulatory issue with Britains Financial Conduct Authority related to the administration of a now-defunct fund managed by former star money manager Neil Woodford.
Japanese banks have been actively engaging in overseas mergers and acquisitions in recent years. The pursuit of higher returns abroad has become essential due to ultra-low interest rates in Japan. This strategic expansion into foreign markets has contributed significantly to the profitability of these banks, evident in their recent financial results, which reached an all-time high for the first half.
Our Reader’s Queries
Is Mitsubishi UFJ part of Mitsubishi?
MUFG Bank was established on 1 October 2005, following the merger of Mitsubishi Tokyo Financial Group (MTFG) and UFJ Holdings. The group’s primary banking entities, Bank of Tokyo-Mitsubishi and UFJ Bank, were combined on 1 January 2006 to create MUFG Bank.
Does Union Bank own Mitsubishi UFJ Financial Group?
MUFG Bank, Ltd. was formerly known as BTMU. It was a subsidiary of MUFG Americas Holdings Corporation and a member of the Mitsubishi UFJ Financial Group when it was called MUFG UnionBank. In December 2022, U.S. Bancorp acquired the bank for $8 billion.
What does UFJ mean?
The acronym UFJ, short for United Financial of Japan, was utilized by the now-defunct entities of UFJ Bank, UFJ Group, and UFJ Holdings.