Mizuho Securities Co., Ltd. (MHSC) and Shinko Securities Co., Ltd. (Shinko) have held discussions regarding the merger of the two companies, based on the new Basic Agreement for Merger signed on April 28, 2008.
Based on the discussions, following the resolutions of respective board meetings, MHSC and Shinko have signed the merger agreement. The merger will be subject to the approvals at the respective general shareholders meetings and clearance from relevant authorities.
In the face of the financial and capital markets worsening on a global scale since the occurrence of the US sub-prime loan problem in 2007, restructuring of US and European investment banks is taking place together with reviews of financial regulation on a global basis. At the same time, Japan’s financial and capital markets also continue to be in a difficult situation. Further worsening of economic environment is set to continue, and the outlook for the country’s securities industry is expected to become increasingly uncertain.
MHSC and Shinko have postponed the effective date of merger twice in the midst of turmoil in the financial and capital markets. However, after the signing of the Basic Agreement for Merger on 28 April 2008, careful exchange of views between the two companies were conducted, and it was determined that it is necessary, as a member of the Mizuho Financial Group, to leverage our strength as a securities arm of a banking institution, to be more competitive in a market where there is now greater uncertainty, to improve service providing capabilities to the clients and furthermore to reestablish business to enable them to offer competitive cutting-edge financial services on a global basis.
The merged entity will, in order to promptly deliver the merger effect (synergistic effect), combine its organization and personnel, strengthen its product-providing capabilities, expand its client base and strengthen its cost control and risk management, even under a severe business environment, to further stabilize its business base.
D.C.