Consumer credit firm Central Finance Co. will join the Sumitomo-Mitsui group and merge with its consumer credit unit Quoq Inc. by April 1, 2009, Central Finance and three key firms in the group said Friday.
Central Finance and the three -- Sumitomo Mitsui Financial Group Inc., Sumitomo Mitsui Banking Corp. and Mitsui & Co. -- said they agreed to form strong capital ties, with the three acquiring a stake of up to 40.66 percent in the consumer credit firm based on the purchases of the common shares and convertible bonds in May.
The merger ratio will be decided later, they said. The amalgamation, which will be implemented after Central Finance invests 7.5 billion yen in Quoq in July, will create the nation's third-largest player in the consumer installment credit industry.
Central Finance, based in Nagoya, provides consumer loan and consumer installment credit services as its mainline operations.
Central Finance, which has so far played a key role in buttressing Mitsubishi UFJ Financial Group Inc.'s retail financing operations, is now set to get out of the group, putting itself under the rival group's wing.
It is unusual for a member of a major financial group to shift to a rival group, but the Mitsubishi UFJ group is set to let Central Finance go, industry officials said.