SFMG completes business negotiations with Promise
An agreement has been reached between SFMG and Promise.
A deal has been arranged that will see Sumitomo Mitsui Financial Group (SFMG) buy out Promise.
Under the terms of the arrangement, which may have required negotiation skill to complete, the latter will become a wholly owned subsidiary of the former.
An 89 billion yen (£743 million) deal is to be launched for the 22 per cent stake in the company that SFMG - which is looking to create sustainable shareholder growth - does not already own.
A further 120 billion yen will be spent by the company purchasing new shares that are going to be issued by Promise.
Tetsuya Kubo, deputy president of Sumitomo Mitsui Banking Corp, told Reuters: "We see consumer finance as a business that can generate bigger profit margins. The industry environment remains tough, but there is undoubtedly a need for healthy consumer finance."
The 200 billion yen investment by SFMG means it has now poured some 400 billion yen into the company.
Posted by Ken Hayes
Source: Reuters, SFMG, September 30th