Freshfields leads on Morgan Stanley Japan tie-up

Freshfields Bruckhaus Deringer and Sullivan & Cromwell have taken lead roles on the merger of the Japanese securities units of Morgan Stanley and Mitsubishi UFJ Financial Group (MUFG), a deal which will form the third-largest brokerage in the country.

Freshfields acted for Morgan Stanley, with a team led by Tokyo-based partners James Lawden, Naoki Kinami, James Wood, Junzaburo Kiuchi and Kazuki Okada. The US bank had previously instructed Wachtell Lipton Rosen & Katz on its $9bn (£6.4bn) sale of a 20% stake to MUFG shortly after the collapse of Lehman Brothers last September.

MUFG turned to Sullivan for advice on the merger - the same firm its used on the Morgan stake purchase.

Sullivan partners Stanley Farrar and Donald Toumey led the US firm's team on the deal. MUFG was also advised by Japanese firm Mori Hamada & Matsumoto.

The two sides at this point have reached only a memorandum of understanding, Farrar says, and many of the specific details are still to be worked out. Integrating two very different employment and compensation systems is expected to be among the main challenges.

MUFG will own a 60% stake in the combined company.

Nomura Holdings and Daiwa Securities Group are currently the first and second-largest Japanese brokerage companies, but MUFG and Morgan Stanley hope their newly-merged venture will eventually claim first place.

This article first appeared on The Am Law Daily blog on americanlawyer.com.

Freshfields Bruckhaus Deringer on the Legal Week Wiki

More news, deals and comment on Sullivan & Cromwell