Japanese bank Mizuho has dropped plans to buy securities firm Nikko Cordial in favor of striking a deal with US banking giant Citigroup, according to unnamed Nikko sources.
The deal would see Mizuho, the second largest bank in Japan and ranked fifth for takeover advice last year, unite with its rival bidder for the scandal-hit Nikko.
It is thought that Mizuho perceives that a deal with Citigroup would enable them to better compete with US companies for advising on takeover deals, of which there were four times as many last year as there were in 2005.
“An alliance with Citigroup would be a solid option as they are seeking more mandates and expansion overseas,” says a market analyst with Nomura Keisuke Moriyama. “Buying a big stake isn’t a priority for Mizuho.”