Japan's SMFG to buy nearly 5% of Jefferies for $386 mln

Workers clean windows next to a signboard of Sumitomo Mitsui Financial Group' SMBC Friend Securities in Tokyo
A man walk past a signboard of Sumitomo Mitsui Banking Corporation's signboard at its branch in Tokyo, Japan, January 25, 2017. Picture taken on January 25, 2017.REUTERS/Kim Kyung-Hoon/File Photo

TOKYO, July 14 (Reuters) - Sumitomo Mitsui Financial Group Inc (8316.T) plans to buy nearly 5% of Jefferies Financial Group Inc (JEF.N) shares for $386 million, the U.S.-based company said on Wednesday, as the Japanese firm looks to boost its presence in the United States.

The companies will also form a partnership to seek cross-border M&A opportunities involving Japanese companies, New York-based Jefferies said.

Japan's second-biggest lender by assets will also provide a $1.65 billion revolving credit facility and a $250 million subordinated loan to support Jefferies' lending capabilities.

The move is part of SMFG's effort to create a foothold in the United States where its unit SMBC Nikko Securities has a small presence.

SMFG currently doesn't have any capital alliance with financial firms in the United States, according to the bank. While its predecessor bank invested in Goldman Sachs Group Inc (GS.N) in 1986, it has already severed the capital tie-up.

In contrast, its bigger rival Mitsubishi UFJ Financial Group Inc (8306.T) invested $9 billion in Morgan Stanley (MS.N) after global financial crisis in 2008. MUFG owns about 20% of the Wall Street bank.

Spurred on by limited business opportunities at home where interest rates are ultra low and the population is rapidly ageing, SMFG has announced a raft of deals this year - primarily in Asia.

This month, it announced plans to buy a 74.9% stake in Fullerton India for $2 billion. read more

SMFG also agreed last month to invest in Philippine bank Rizal Commercial Banking Corporation, and in April it said it would invest in Vietnam's biggest non-bank lender FE Credit.

($1 = 110.4700 yen)

Reporting by Makiko Yamazaki and Takashi Umekawa in Tokyo, additional reporting by Manas Mishra in Bengaluru; editing by Edwina Gibbs and Sriraj Kalluvila

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