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NIKKO CORDIAL: Citi Completes Tender Offer & Acquires 61% Stake

Troubled Company Reporter, Apr. 27, 2007 

Citi has completed its tender offer to become the majority
shareholder of Nikko Cordial Corporation.  The tender offer
period expired on April 26, 2007, with about 541 million shares
tendered and accepted.  Following the settlement of the tender
offer for approximately $7.7 billion in cash on May 9, 2007,
Citi will own a total ownership stake in excess of 60%.

In a statement, Nikko Cordial disclosed that Citigroup Japan
Investments LLC now has a 61.08% equity stake in the company by
virtue of the 588,698,520 shares held and will become the parent
company and largest shareholder of Nikko Cordial as of May 9,

A full-text copy of Nikko Cordial's announcement concerning the
change in the parent company is available for free at:


A full-text copy of Nikko Cordial's notice regarding the results
of the tender offer is available for free at:


"We are very pleased to now fully pursue our alliance with Nikko
Cordial, a premier Japanese financial institution with whom we
already have a strong relationship. Citi has operated in Japan
for more than 100 years, and we are committed to deepening our
client relationships and expanding our capacity to provide
existing and new clients with best-in-class solutions in a key
growth market for us," said Charles Prince, Chairman and Chief
Executive Officer of Citi.

"The successful completion of the tender underscores our focus
on seizing opportunities to grow internationally both
organically and through targeted acquisitions," Mr. Prince
continued. "The combination of Nikko's local expertise, deep
talent pool, strong brand, and extensive countrywide
distribution network with Citi's global reach and innovative
products and services will benefit our clients and help drive
future growth of both franchises."

This alliance builds on the strong relationship that Citi and
Nikko Cordial have forged over the past eight years and the
success of their existing joint ventures, including Nikko
Citigroup Limited, one of Japan's leading investment banks and a
strategically important part of Citi's global capital markets
and banking business.

"The strategic alliance immediately brings Citi's Japanese
businesses to scale and enables us to leverage new capabilities,
including Nikko's leading brokerage operation," said Douglas
Peterson, Chairman and CEO of Citibank Japan. "We will have the
ability to access Nikko Cordial's large network of corporate
clients and capitalize on increased acquisition activity in
Japan. The alliance will also allow clients to benefit from
world-class global services that Nikko Cordial does not
currently offer, such as Citi's loan products."

"We are very pleased that Citi's tender offer has been
successful. This strategic alliance is a significant step in
positioning our company for future growth, helping us meet the
evolving needs of our retail and corporate clients through our
collaboration with Citi," said Shoji Kuwashima, President and
CEO of Nikko Cordial Corporation. "Nikko Cordial looks forward
to strengthening our long and effective business relationship
with Citi."

Citi and Nikko Cordial, under the direction of a joint steering
committee, will be identifying a wide range of opportunities to
leverage their respective retail businesses, capital markets and
banking businesses, technology and administrative services,
asset management, principal investments, organizational
structure, and employees and management in Japan.

For Citi, the transaction is expected to be neutral to earnings
per share in 2007 and accretive in 2008 and thereafter.

                           About Citi

Citi -- or --  
a global financial services company, has some 200 million
customer accounts and does business in more than 100 countries,
providing consumers, corporations, governments and institutions
with a broad range of financial products and services, including
consumer banking and credit, corporate and investment banking,
securities brokerage, and wealth management.  Citi's major
brands include Citibank, CitiFinancial, Primerica, Citi Smith
Barney and Banamex.

                      About Nikko Cordial

Headquartered in Tokyo, Japan, Nikko Cordial Corporation -- -- is mainly engaged in the provision of
financial services in the securities-related field. The company
operates in four business segments. The Retail segment provides
consulting services for financial products management. The Asset
Management segment provides asset management services for
individual, corporate and foreign investors. The Investment
Banking segment provides corporate finance and capital market
services, mergers and acquisitions, advisory services, trading
services for institutional investors and research services. The
Merchant Banking segment is involved in the investment of
corporate issued stocks, bonds, securities-related financial
products and other financial products. Nikko Cordial has 62
consolidated subsidiaries. It has oversea operations in the
United States, the United Kingdom, Luxemburg and Singapore. The
company has a global network.

                          *     *     *

The Troubled Company Reporter-Asia Pacific reported on March 8,
2007, that Fitch Ratings revised the Rating Watch on the foreign
and local currency Issuer Default and Individual ratings of
Nikko Cordial Corporation and Nikko Cordial Securities Inc. to
Evolving from Negative.  These ratings were placed on Watch
Negative on Dec. 21, 2006.

The ratings are:

   NCC: Individual rating C/D and Support rating 5.

   Nikko Cordial Securities: Individual C and Support rating 4.

As reported in the TCR-AP on Dec. 22, 2006, Japan's Securities
and Exchange Surveillance Commission began investigating
Nikko Cordial for falsifying its annual financial statements for
the business year ended March 30, 2005, declaring JPY14 billion
in false profits, and using them to procure money from the

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