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Morgan Stanley, Mitsubishi UFJ CEOs Said to Meet on Tie-Ups

Morgan Stanley and Mitsubishi UFJ Financial Group Inc. (8306)’s chief executive officers will meet this week in Tokyo to discuss deepening their partnership, said two people with knowledge of the matter.

Mitsubishi UFJ’s Katsunori Nagayasu and Morgan Stanley’s James Gorman will meet on Oct. 13 to discuss ways to strengthen global tie-ups including their Japan investment banking ventures, said the people, who asked not to be identified as the meeting is private. Gorman is attending the Institute of International Finance’s annual meeting being held in Tokyo.

The banks, whose joint venture ranks No. 1 in Japan bond underwriting this year, aim to boost investment banking as domestic companies look overseas to tap faster-growing markets. The tie-up this year managed transactions including Japan Airlines Co. (9201)’s $8.5 billion initial public offering and Dentsu Inc. (4324)’s $5.1 billion takeover of U.K.-based Aegis Group Plc. (AGS)

“With Mitsubishi UFJ’s close relationships with a slew of commercial banking clients and Morgan Stanley (MS)’s expertise in global investment banking, the two should be able to further expand their M&A advisory deals, particularly in Asia,” said Natsumu Tsujino, a Tokyo-based analyst at JPMorgan Chase & Co.

Morgan Stanley’s Tokyo-based spokesman Natsuo Nishio declined to comment on the chief executive’s schedule. Mitsubishi UFJ’s Tokyo-based spokesman Hironori Imafuku also declined to comment.

The IIF, which represents more than 460 banks and financial companies, is holding its meeting in Tokyo in conjunction with annual meetings of the International Monetary Fund and World Bank.

Rank Climbing

Morgan Stanley and Mitsubishi UFJ ranked No. 2 among financial advisers for mergers and acquisitions involving Japanese companies as of today, up from sixth last year, data compiled by Bloomberg show. They ranked third for equity underwriting, up from fifth in 2011, the data show.

Mitsubishi acquired a stake in Morgan Stanley when it invested $9 billion in the New York-based bank in October 2008, as the firm’s stock price collapsed in the wake of Lehman Brothers Holdings Inc.’s bankruptcy.

In 2009, the banks agreed to jointly offer corporate finance and underwriting services to companies in the Americas and work toward creating opportunities for underwriting, syndicated loans and derivative businesses in Asia, Europe, the Middle East and Africa.

Ventures Formed

The companies in 2010 formed two investment banking ventures, Mitsubishi UFJ Morgan Stanley Securities Co., and Morgan Stanley MUFG Securities Co.

In April last year Morgan Stanley reached a deal to convert most of Mitsubishi UFJ’s preferred stock in the company, paying a premium of about $2 billion to eliminate annual dividend payments of $784 million.

The agreement gave the Tokyo-based lender a 22 percent ownership interest in Morgan Stanley, making it the New York- based investment bank’s biggest common shareholder.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net; Shigeru Sato in Tokyo at ssato10@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net

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