Citigroup Inc. is selling its stake in Nikko Asset Management to The Sumitomo Trust and Banking Co., Ltd. for about US$795 million, the U.S. financial services company said Thursday.

Under the terms of the deal, Citi will sell its 64% ownership interest in Nikko AM to Sumitomo Trust, including the ownership interest that it holds through Nikko Principal Investments, in an all cash transaction. Sumitomo Trust is also expected to acquire the beneficial ownership interests in Nikko AM held by various minority investors to bring its total stake to about 98.5% at closing. The remaining 1.5% ownership interest will continue to be held by an employee stock ownership plan maintained on behalf of Nikko AM employees.

The transaction is expected to close in the fourth quarter, subject to regulatory approvals and customary closing conditions, and is not expected to have a material impact on Citi’s net income.

“With the previously announced sales of our brokerage and trust banking businesses in Japan, this transaction marks another milestone in the implementation of our Citicorp/Citi Holdings strategy. We remain committed to Japan, where we have proudly served clients for more than a century. We can now shift our focus from reshaping our franchise in this very important market to building our core businesses and better serving clients,” said Citi CEO, Vikram Pandit.

IE