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TOKYO — Japan's biggest bank says it has scrapped plans to buy Citigroup Inc.'s Japan trust banking unit.
In December, a unit of Mitsubishi UFJ Financial Group Inc., known as MUFG, agreed to buy NikkoCiti Trust and Banking Corp. in an all-cash deal valued at 25 billion yen ($261.2 million).
MUFG is walking away from the deal after failing in its bid to buy another Citigroup unit in Japan, Nikko Asset Management Co. It had also been a leading bidder for Citigroup's Japan brokerage unit, Nikko Cordial Securities Inc., but lost out to rival Sumitomo Mitsui Financial Group Inc. earlier this month.
MUFG decided that owning NikkoCiti Trust alone would bring limited benefits, the Nikkei financial daily said earlier this week.
"Considering the change in their respective strategies, both companies concluded that it is desirable to terminate the share transfer," Mitsubishi UFJ Trust and Banking Corp. and Nikko Citi Holdings Inc. said in a joint statement Thursday.
The deal had been scheduled to close in April, but MUFG decided in March to delay the plan indefinitely amid concerns that NikkoCiti Trust would be hit with steep losses from bankrupt moneylender SFCG Co.
In trading Friday, shares of MUFG jumped 3.4 percent, outpacing the benchmark Nikkei 225 index's 1.7 percent rise.
