Citigroup Inc, the recipient of three US government bailouts, is seeking bidders for its Japanese asset management unit, four people familiar with the matter said.
The New York-based bank started the auction process to sell Nikko Asset Management Co this week and invited bids from Japanese banks, including Mizuho Financial Group Inc, the people said, declining to be identified because they aren’t authorized to discuss the deal publicly.
Citigroup is selling off assets after reporting more than US$88 billion of credit losses and write downs tied to the US subprime-mortgage crisis, to data compiled by Bloomberg showed. Japanese lenders may see the sale of Nikko Asset as a chance to boost their asset management businesses, said Naoko Nemoto, a managing director at Standard & Poor’s.
Citigroup in January put Japanese units, including Nikko Asset, on a list of businesses flagged for eventual sale, about a year after buying them as part of the ¥1.6 trillion (US$16 billion) acquisition of Tokyo-based Nikko Cordial Corp.
Nikko Asset, run by chief executive Timothy McCarthy, managed ¥9.1 trillion and had 561 employees as of Dec. 31. The asset manager is worth about ¥50 billion to ¥100 billion, the people said.
Mizuho is considering bidding for Nikko Asset, the people said.
Citigroup may seek partners for Nikko Asset and Nikko Cordial Securities Inc or sell them in an initial public offering, people familiar with the matter said earlier, citing an internal memo sent by Douglas Peterson, the company’s chief executive for Japan, to employees on Feb. 25.
The US company is also considering seeking buyers for Nikko Cordial, the people said. Citigroup may combine the two sales.
The US government has channeled US$45 billion into Citigroup and agreed to take a 36 percent stake after the bank posted five quarterly losses.