(Bloomberg) -- Daiwa Securities Group Inc. and Sumitomo Mitsui Financial Group Inc. agreed to merge asset management units, said people familiar with the situation.
Sumitomo Mitsui will take a 50.1 percent stake in the combined company, and Daiwa will own more than 20 percent, said the people, who asked not to be identified before an announcement in Tokyo this afternoon. Reports that the companies were negotiating a deal emerged last week.
The move renews ties between Daiwa and Sumitomo Mitsui, which had an investment-banking joint venture until 2009. Daiwa SB Investments Ltd., part of Japan's second-largest brokerage, plans to complete the merger with Sumitomo Mitsui Asset Management Co., a unit of the nation's second-largest lender, in April 2019, the people said.
Hiroki Aoyama, a spokesman for Daiwa in Tokyo, declined to comment, as did Sumitomo Mitsui's spokesman Yuichiro Himuro.
Sumitomo Mitsui Asset Management had 11.6 trillion yen ($106 billion) in assets under management as of December. Daiwa SB Investments managed 6 trillion yen as of March. The combined company will have more than 1,000 employees.
One investment unit remains outside the merger, according to the people. Daiwa will maintain Daiwa Asset Management Co., with assets of 16.7 trillion yen, as a fully owned company, the people said.
--With assistance from Gareth Allan
To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net, Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net, Komaki Ito in Tokyo at kito@bloomberg.net.
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward
©2018 Bloomberg L.P.
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