Jefferies Financial Group, Inc. (NYSE:JEF) and Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG), Sumitomo Mitsui Banking Corporation (SMBC), and other group companies announced today that they have signed a memorandum of understanding to further expand their global strategic alliance to now include enhanced collaboration across Europe, the Middle East and Africa (EMEA) on future corporate and investment banking business opportunities.
In support of the initial strategic alliance in 2021, SMBC provided $2.25 billion in financing to Jefferies and purchased approximately 4.5% of the issued and outstanding common shares of Jefferies. In April 2023 the alliance was further bolstered by SMBC announcing its intention to raise its economic ownership to up to 15% on an as converted and fully diluted basis, which would result in SMBC becoming one of Jefferies’ most significant shareholders.
The Jefferies-SMBC strategic alliance commenced in 2021 in the U.S. and Japan and was significantly expanded in the U.S. in 2023, broadening the scope of collaboration in M&A advisory services, increasing collaboration across the firms’ equities and debt capital markets businesses, and launching a joint coverage model for designated investment grade clients. The alliance has now been further extended to formally cover EMEA in these business areas.
Jefferies and SMBC have already been collaborating to deliver client solutions for over two years and this latest step enhances the alliance across the growing regional footprint in EMEA. The extended arrangement will benefit clients through the collective global insights and capabilities delivered from the comprehensive corporate and investment banking product and advisory platform offered by the two firms.
Rich Handler, Jefferies’ CEO, and Brian Friedman, its President, stated:
“We are thrilled with the rapid early success and positive client response following the U.S. expansion of our alliance with SMBC Group in April 2023, and the next logical and straightforward step is to further expand our collaboration across EMEA. Over the last several years, Jefferies has made a significant investment to broaden and solidify its investment banking, sales, trading and research capabilities across EMEA. We now further accelerate these efforts by aligning with the significant capital base and world-class capabilities of SMBC Group. We are grateful to have such a productive relationship with SMBC Group and expect it to produce meaningful results for our clients and shareholders.”
President and Group CEO of SMFG, Toru Nakashima, President and CEO of SMBC, Akihiro Fukutome commented:
“Since inception in 2021, our strategic alliance with Jefferies in the U.S. and Japan has been progressing well. Our combined capabilities allow us to better serve our clients and the partnership is already positively contributing to SMBC Group’s performance and growth. Following this success, we are excited to launch this next phase of collaboration in EMEA, having already executed some joint transactions in the region. The enhanced strategic alliance with Jefferies represents a significant investment on behalf of SMBC Group and we believe the global partnership delivers mutual benefit and enhanced value for our stakeholders. Our clients expect us to be a global solutions partner and the formalisation of the joint arrangements in EMEA, in addition to the U.S. and Japan, leaves us better positioned to deliver on those expectations.”
