Morgan Stanley and MUFG to form the second-largest brokerage in Japan

Mitsubishi UFJ Financial Group Inc., Japan's largest finance company, and Morgan Stanley, a global financial services provider, announced on Thursday about signing up a deal to merge their Japanese securities units. The agreement reveals the financial giants’ intention to create the second-largest brokerage in Japan while forming the base for a new global alliance that claims to become second in size in the Japanese securities market after Nomura Holdings.

MUFG is to own a 60% stake, while Morgan Stanley will get the rest of 40% in the combined entity. 

MUFG CEO Nobuo Kuroyanagi stated the deal to be a key step toward the company’s goal to combine two strong franchises in Japan and create a stronger, more sophisticated institution that will be better able to respond to the needs of both companies' clients. 

Under the agreement terms, Morgan Stanley will appoint the joint venture's chairman, while MUFG will name its president and CEO. The deal is expected to close by the end of March 2010.