(Bloomberg) — Mitsubishi UFJ Financial Group Inc. plans to buy Japanese robo-advisor WealthNavi Inc. for up to 99.7 billion yen ($665 million), aiming to expand its investment capabilities. financial technology and meet the needs of households connecting to the Internet. invest more of their savings.
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Japan’s largest bank is seeking to acquire WealthNavi through a tender offer at ¥1,950 per share and make it a wholly owned unit, according to a filing Friday. That represents an 84% premium to the fintech company’s closing price on Thursday.
Japanese financial firms are expanding services to help households invest more of their $7.5 trillion in cash as inflation emerges in Asia’s second-largest economy. More people have opened so-called NISA accounts following the expansion of the country’s tax-free investment program this year, helping to fuel the stock market rally.
MUFG took a 15% stake in WealthNavi earlier this year. The Tokyo-based asset manager, listed in 2020, had a market capitalization of 62.8 billion yen before the deal was announced.
Shares of WealthNavi jumped 28%, their highest level in nearly four years, to ¥1,358 in Tokyo on Friday, after being non-traded during the session. This reduced this year’s decline to 30%. MUFG gained 1.3%, bringing this year’s increase to 48%.
Acquiring WealthNavi would bolster MUFG’s prospects of “creating a more comprehensive financial super-app,” Koichi Niwa, an analyst at Citigroup Inc. in Tokyo, wrote in a note before the announcement. It would also help WealthNavi provide a full range of financial services on its platform, he added.
Founded by CEO Kazuhisa Shibayama in 2015, WealthNavi provides online wealth management services, including automated cash transfers to investment products. The company managed 1.34 trillion yen as of October 31, according to an earnings presentation. It expects an operating profit of 531 million yen this year.
Japan’s robo-advice market is expected to reach 3 trillion yen this fiscal year and is expected to reach around 12 trillion yen by 2030, according to Yano Research Institute.
–With the help of Takashi Nakamichi, Hideyuki Sano and Aya Wagatsuma.
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