According to Bloomberg,
) is set to acquire a 30% stake in
Mitsubishi UFJ Financial Group, Inc.
) wealth-management business in Japan. The deal will expectedly
be complete early next year.
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On closure of the deal, Mitsubishi UFJ will continue to run the
business, while Morgan Stanley will be able to offer a wide range
of research and investment products to the Japanese clientele.
Mitsubishi's wealth-management unit in Japan caters to wealthy
clients and is an attractive acquisition for Morgan Stanley.
With Asia emerging as a lucrative business market for foreign
companies, Morgan Stanley is keen to tap the growth opportunities
of the Japanese economy. Earlier, in 2010, Morgan Stanley and
Mitsubishi had set up two investment-banking ventures in Japan.
Mitsubishi's wealth-management business was previously a joint
venture (JV) between Mitsubishi UFJ and
Bank of America
) Merrill Lynch brokerage unit. However, in Dec 2012, Mitsubishi
purchased the remaining 49% stake in the JV.
The latest deal by Morgan Stanley strengthens its ties with
Mitsubishi. Mitsubishi UFJ, which presently owns about 22% stake
in Morgan Stanley, had invested $9 billion in the U.S. bank at
the time of the 2008 economic crisis.
In the backdrop of a tepid economic recovery in the U.S coupled
with stringent regulations and the eurozone crisis, Asia has been
attracting corporate companies. Fast growth, increased inflow of
funds and investment in infrastructure to drive growth in the
emerging economies of Asia favorably position these markets.
Among other global banks,
Credit Suisse Group AG
) has also exploited the booming economy in Japan by acquiring
HSBC Holdings Plc's Japanese private banking unit and Standard
Chartered Plc's wealth-management business.
Morgan Stanley currently carries a Zacks Rank #3 (Hold).