Investment · Investment banking
SMBC to raise Jefferies stake to up to 20% in expanded alliance
- Investor
- Sumitomo Mitsui Financial Group (SMBC Group) (Tokyo)
- In
- Jefferies Financial Group, New York, New York
- Value
- ¥135B (about $912M)
- Status
- In progress. Jefferies said on September 28, 2026 that SMBC had raised its stake to about 20%, making it the largest shareholder.
- Date
- 2025-09-18
SMBC Group will raise its economic ownership of Jefferies from about 15% to as much as 20%, investing about ¥135 billion. It will buy shares in the market and exchange them for non-voting stock, keeping its voting stake below 5%. The partners also plan a Japanese equities joint venture, SMBC Nikko Jefferies Securities, to start in January 2027, and SMBC will provide about $2.5 billion in new credit facilities.
Why it matters
The deal deepens a Japanese megabank's bet on a U.S. investment bank as a way into global capital markets without a full takeover. It mirrors MUFG's long-standing tie-up with Morgan Stanley.
The deal
SMBC Group said the roughly ¥135 billion cost was based on the share price at the time of the September 2025 announcement, and that the added stake would cut its CET1 capital ratio by about 13 basis points. A February 2026 Jefferies filing said SMBC planned to buy about 13 million more shares in the market. SMBC can exchange voting common shares for non-voting preferred stock under a 2023 exchange agreement, which keeps its voting interest below 5%.
SMFG said it was not planning, for now, to make Jefferies an equity-method affiliate. Its investor FAQ said that would require meeting strict economic and governance tests and booking goodwill, and that a higher stake would also bring Jefferies under SMBC's US bank holding company structure.
The wider alliance
The planned joint venture, SMBC Nikko Jefferies Securities, will combine wholesale Japanese equity research, sales and trading and equity capital markets work. SMBC Group will hold 60% of the voting rights and 70% of the economic interest, with Jefferies holding the rest. Opening in January 2027 depends on licenses and approvals.
The roughly $2.5 billion of new credit facilities from SMBC will support leveraged lending in Europe, the Middle East and Africa, pre-IPO lending in the US, and asset-backed securitization. The partners also agreed to widen joint coverage of large private equity sponsors and to originate, underwrite and execute syndicated leveraged loans together in EMEA.
Reuters reported that SMBC expects the Jefferies relationship to add about ¥50 billion to profit by the fifth year, including about ¥10 billion from the equities joint venture.
Where things stand
In its results for the quarter ended August 31, 2026, released on September 28, 2026, Jefferies said SMBC had raised its equity ownership to about 20%, making it the largest shareholder. A Jefferies 10-Q had put SMBC's holding at about 15.9% on an as-converted basis as of February 28, 2026.
The next milestone is the launch of the joint venture in January 2027.
Sources
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