Jefferies Financial Group Inc. (NYSE:JEF) and SMBC Group announced today that they have expanded their global strategic alliance to strengthen their collaboration on future corporate and investment banking business opportunities in the Canadian market.
The SMBC Group includes Sumitomo Mitsui Financial Group, Inc. (NYSE:SMFG) (“SMFG”), Sumitomo Mitsui Banking Corporation (“SMBC”), SMBC Nikko Securities America, Inc., SMBC Nikko Securities Canada, Ltd. and another group of companies.
In December 2023, Jefferies announced that it has created full investment banking and capital markets capabilities in Canada, opening a new 40+ person office with specific expertise in investment banking, equity research and sales and trading across the board. Jefferies will now align its extensive industry knowledge, M&A, leveraged finance and equity capital in Canada with SMBC Group’s deep banking and debt capital markets expertise and strong balance sheet to support and serve clients.
The SMBC-Jefferies strategic alliance was launched in 2021, focusing on US leveraged finance and Japanese cross-border M&A. In 2023, it expanded significantly in the US to expand the scope of cooperation in M&A advisory services, increase cooperation between the companies’ equity and capital markets businesses, and launch a joint coverage model for certain investment-grade clients. In January 2024, the alliance was further expanded to cover Europe, the Middle East and Africa (EMEA).
In support of the initial strategic alliance in 2021, SMBC provided $2.25 billion in financing to Jefferies and purchased approximately 4.5% of Jefferies’ outstanding common stock. In April 2023, the alliance was further strengthened when SMBC announced plans to increase its financial ownership by up to 15% on a converted and fully diluted basis, which would see SMBC become Jefferies’ largest shareholder.
Bruce Rothney, CEO of Jefferies Canada, said:
“In just the first few months since the opening of Jefferies’ new office in Canada, we have already witnessed the benefits that the Jefferies-SMBC strategic alliance will bring to our valued clients. SMBC’s capital base and global capabilities will allow us to jointly offer comprehensive, full-service solutions to our customers in Canada. We are excited by the opportunity to accelerate efforts with our partners at SMBC as we pursue our mission to establish Jefferies as a leading full-service global investment banking and capital markets firm in Canada.”
Takeshi Okamoto, General Manager of SMBC Canada, commented:
“Adding another region to SMBC’s strategic alliance with Jefferies builds on our initial success as global partners. We look forward to better serving our Canadian clients through the combined strength of Jefferies and SMBC’s global investment banking and corporate banking capabilities, and look forward to continuing to expand our alliance.”