Mitsubishi UFJ Financial Group Inc. plans to create a new securities company with Morgan Stanley by merging their Japanese units next spring, sources said Wednesday.
The merger of Mitsubishi UFJ Securities Co. with Morgan Stanley Japan Securities Co. will create one of the largest wholesale securities service firms in the country.
A formal announcement of the merger of the two brokerage units is expected before the end of the week.
MUFG, the nation's top financial group, is likely to take charge of the combined entity with a 60 percent stake in the venture, while Morgan Stanley will hold the remaining 40 percent, the sources said.
A holding company is expected to be established under the auspices of MUFG to oversee the new securities firm and affiliated companies, they said.
Mitsubishi UFJ Securities is known for its strength in underwriting of domestic bonds, while Morgan Stanley is active in investment banking, including mergers and acquisitions.
MUFG made a $9 billion investment in the struggling U.S. investment bank last October.