MUFG, Morgan in securities merger

The merger between Mitsubishi UFJ Securities Co. and
Morgan Stanley Japan Securities Co. would produce one of Japan's
largest wholesale securities firms. Its business would include mergers
and acquisitions as well as bond underwriting.

Further talks between the two are expected to lay out
the method and timing for the merger, as well as strategies to boost
their overseas presence, the sources said.

MUFG, Japan's largest banking group, will
acquire a 21 percent stake in Morgan Stanley, the second-largest U.S.
investment bank, on a voting rights basis for $9 billion, making it
Morgan Stanley's top shareholder. MUFG will seek to make Morgan Stanley
a group company and apply the equity method to its financial results.

The U.S. subprime mortgage crisis has triggered
a sweeping realignment of the global financial sector that is making
its way to Japan's brokerage industry. The shakeup is likely to
intensify as sliding stock prices erode the earnings of domestic
securities firms, observers said.

Morgan Stanley Japan Securities, which acquired
its securities business license in 1984, is active in asset management
and real estate business for corporate customers and institutional
investors.

Mitsubishi UFJ Securities was established in 2005.

posted on Oct 3, 2008 10:22 PM ()

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