Japan’s Mizuho Expands US Presence With A $550M Greenhill Deal

Mizuho Financial Group has announced a purchase deal for a US M&A advisory company known as Greenhill & Co Inc. The company will be acquired for $550 million, with the company saying that this amount will also include debt.

Mizuho expands US presence with a $550M Greenhill deal

Mizuho is the third-largest lender in Japan. The company is currently exploring securing a larger share of the largest investment-banking fee pool globally. Greenhill stock performed well after the acquisition deal, and it more than doubled to reach $14.66 at market close on Monday. The stock is slightly below the offer price of $15 per share.

The gain reported by Greenhill stock on Monday allowed the shares to wipe out the losses that it faced in the last year. The stock was affected by the increasing interest rates on deal-making. When the company filed for its initial public offering (IPO) in 2004, the stock was priced at $20.

The Greenhill business will be located within the banking division at Mizuho. The operations will also be led by the head of banking in the American region, Michal Katz. The chairman and CEO of Greenhill, Scott Bok, said that he would emerge as the chairman of the M&A and the restructuring advisory business at the company.

The President and the CEO of Mizuho Securities USA, Jerry Rizzieri, commented on the development, saying that the company demonstrated a solid M&A practice across Japan, but it was still new in operations across the US.

“We have a strong M&A practice in Japan. But it’s really early days here in the US and in the other regions. So this is a way for us to scale in a meaningful way,” Rizzieri said.

Over the years, Mizuho has shown significant interest in the US industry. The bank has doubled down on US debt underwriting following the acquisition of the North American corporate loan portfolio for the Royal Bank of Scotland.

The deal left the M&A advisory and equity underwriting at the company as areas that were targeted to achieve more growth. In 2022, Mizuho announced the acquisition of a private equity placement agent based in Texas known as Capstone Partners.

Japanese banks show interest in the US market

However, Mizuho is not the only Japan-based bank showing interest in the US. Other Japanese banks have also been growing their presence across the United States through strategic deals and share purchases.

The largest competitor of Mizuho, Sumitomo Mitsui Financial Group, has announced plans to grow its stake in Jefferies Financial Group. Jefferies is one of the largest investment banks in the US, and Sumitomo Mitsui Financial Group wants to expand its stake from 4.5% to 15%.

In 2022, the CEO of the brokerage division at Mizuho, Yoshiro Hamamoto, said that the company did not have room to pursue further growth in the US. As such, it was exploring acquisitions to achieve this growth. The recent acquisition is a step further by the company to achieve its strategic goal.