All clear for world's biggest bank
(CNN) -- Japan's Supreme Court has cleared the way for a tie-up between UFJ Holdings and Mitsubishi Tokyo Financial Group that will create the world's biggest bank.
After Monday's favorable court ruling, shares in UFJ finished 1.3 percent higher to 548,000 yen Tuesday, compared with a fall of 0.9 percent in the benchmark Nikkei 225 stock average.
MTFG was down 1.2 percent to 985,000 yen.
UFJ's other suitor, Sumitomo Mitsui Financial Group (SMFG), finished down 0.3 percent to 661,000 yen following the adverse court result, which it described as "regrettable".
UFJ and MTFG plan to merge their operations by October 2005. They would have combined assets of 188 trillion yen ($1.7 billion), eclipsing U.S. financial giant Citigroup's asset base of $1.32 trillion.
The Supreme Court on Monday upheld a lower court ruling that UFJ could hold merger talks with parties other than Sumitomo Trust & Banking Co., part of SMFG.
Earlier this month, UFJ posted a net first-quarter loss of 91.58 billion yen ($832 million). It is the weakest of Japan's four megabanks and the only one to post a loss last financial year.
In May, UFJ had agreed to sell its trust bank to Sumitomo Trust, but cancelled that agreement in mid-July so it could pursue merger talks with MTFG.
A Tokyo District Court in late July upheld a challenge from SMFG against that plan, and ordered UFJ and MTFG to put their talks on hold.
But on August 11, the Tokyo High Court repealed that temporary injunction. Monday's ruling by the Supreme Court effectively exhausts SMFG's appeal avenues.
A merger between UFJ and SMFG would have created a group with total assets of 180 trillion yen. The other member of Japan's big four, Mizuho Financial Group, has assets of 135 trillion yen.
