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October 19, 2004

Legal Woes May Not Disrupt Creation of World’s Largest Banking Group

The complex game of mergers and acquisitions has become even more complicated by lawsuits as Mitsubishi Tokyo Financial Group Inc. attempts to merge with UFJ Holdings Inc. However, an injunction filed by Sumitomo Trust & Banking Co. Ltd. may not be able to stop the deal.

According to Martin Foster’s article, "Sumitomo Trust Weighs Legal Move" in The Daily Deal, Sumitomo Trust & Banking Co. is considering filing a formal injunction against the merger after their agreement to buy UFJ’s trust bank for $2.75 billion broke apart two months ago. Japan’s supreme court overturned a provisional injunction against the merger but “left the door open” for continued litigation when it ruled that the negotiating rights between Sumitomo Trust and UJF Holdings were binding.

A spokesman for Sumitomo Trust stated that legal action “will eventually happen.”

However, the Nihon Keizai Shimbun newspaper reported that if Sumitomo Trust does decide to pursue further legal action, a decision on the matter may take more than a year and would therefore come too late to prevent the merger, which is planned for October 2005.


Posted by Quentin Johnson at 08:17 PM in Alliances | Permalink

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