Jefferies Financial Group Inc. JEF and Sumitomo Mitsui Financial Group Inc. SMFG, along with Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities Inc., unveiled a sweeping expansion of their global strategic alliance on Friday.
The agreement marks a new phase in the collaboration that began in 2021 and later extended across multiple regions and services.
The latest move will deepen cooperation in capital markets, lending and sponsor coverage while expanding equity ties and credit support.
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The centerpiece of the new pact is a plan to merge the firms' wholesale Japanese equity research, sales, trading and equity capital markets units. The joint venture, expected to launch in January 2027, will blend Jefferies' global equities reach with SMBC Group's local market knowledge and financial strength.
Together, they aim to create a top-tier platform for institutional clients in Japan and abroad.
The two firms also pledged to widen their joint coverage of large sponsor clients, particularly in Europe, the Middle East and Africa.
This initiative includes shared origination, underwriting and execution of leveraged loans in the region, designed to strengthen service offerings for global private equity sponsors and corporate borrowers.
SMBC intends to increase its stake in Jefferies from 15% to as much as 20% by acquiring shares in the open market, subject to regulatory approval.
To further support collaboration, SMBC will extend roughly $2.5 billion in new credit facilities, funding activities such as EMEA leveraged lending, U.S. pre-IPO financing and asset-backed securitization.
Toru Nakashima, director president and group CEO of SMFG, said the goal is to align both firms to deliver "the best financing and advisory solutions" worldwide.
Price Action: JEF shares are trading higher by 0.92% to $71.01 premarket at last check Friday.
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