Sumitomo Mitsui Agrees to Provide Jefferies with $2.5 Billion in New Credit Facilities

Sumitomo Mitsui Financial Group (SMFG) has agreed to provide Jefferies with $2.5 billion in new credit facilities, helping the two firms' efforts. SMFG is reportedly considering increasing its stake in Jefferies to around 20%. The deal follows the Japanese bank's acquisition of a 20% stake in YES BANK in India.

Wall Street’s Jefferies Financial Group and Japan’s Sumitomo Mitsui Financial Group (SMFG) are bolstering their strategic alliance, with SMFG agreeing to provide Jefferies with $2.5 billion in new credit facilities. This move is part of a broader effort to expand their global presence and services in mergers and acquisitions, borrowing, and investing Jefferies Deepens Ties With Japan’s Sumitomo Mitsui^[1].

The latest agreement sees SMFG’s commercial banking subsidiary, SMBC, increasing its equity ownership in Jefferies to up to 20% in the open market, from its current stake of around 15%. Additionally, the firms are planning to set up a joint venture in Japan by January 2027, merging SMBC Nikko Securities with Jefferies’s existing Japanese operations. This joint venture will offer clients equity research, sales and trading, and equity capital markets services Jefferies Deepens Ties With Japan’s Sumitomo Mitsui^[1].

This strategic partnership follows SMFG’s acquisition of a 20% stake in YES BANK in India. The acquisition, completed in September 2025, saw SMBC purchasing a 13.18% stake in YES BANK from State Bank of India (SBI) for ₹8,888.97 crore. This transaction represents the largest cross-border investment in the Indian banking sector SBI divests 13.18% stake in Yes Bank to Sumitomo Mitsui Banking Corp for ₹8,889 crore^[3].

The expansion of the SMBC alliance with Jefferies is expected to strengthen the appeal of Jefferies’ platform, attracting more top-tier talent and larger private-equity firms. Jefferies President Brian Friedman noted, “This expansion will allow us to serve more companies and bigger private-equity firms” Jefferies Deepens Ties With Japan’s Sumitomo Mitsui^[1].

Analysts are optimistic about the potential impact of this deal on Jefferies’ stock. Wall Street analysts forecast a 6.63% upside with a consensus "Outperform" recommendation, while GuruFocus estimates suggest a potential 37.69% downside from the current price. The average one-year price target for Jefferies Financial Group Inc (JEF) is around $74.67, with the most optimistic forecast reaching $77.00 Jefferies (JEF) Gains as Sumitomo Mitsui Eyes Stake Increase^[2].

The latest developments underscore SMFG’s strategic intent to expand its global footprint and Jefferies’ ambition to strengthen its global financial services offerings. This alliance is likely to bring significant benefits to both firms and their clients, positioning them strongly in the competitive global financial landscape.