Five firms in bid to acquire Citigroup's Nikko Asset Management

 Monday, reports said that five companies are in the running to acquire Japan-based asset management group Nikko Asset Management Co. Ltd, a unit of the U.S. Financial services giant Citigroup Inc.(C: News ).

Sumitomo Mitsui Financial Group Inc. (SMFNF.PK: News , SMFJY.PK), Sumitomo Trust & Banking Co., Mizuho Financial Group Inc.(MFG: News ), brokerage firm Nomura Holdings Inc. (NMR: News )and insurer T&D Holdings Inc. have reached the second round of bidding for Nikko Asset, reports said.

Last Month, Citigroup said it reached a definitive agreement to sell its Japanese domestic securities business, conducted principally through Nikko Cordial Securities Inc., to Sumitomo Mitsui Banking Corp. in a transaction with a total cash value to Citi of 774.5 billion yen or US$7.9 billion. The transaction did not include its Japanese fund management division Nikko Asset Management Co, which offers investors investment trusts and high value-added advisory services to institutional investors.

The U.S. financial services giant Citigroup shed Nikko Cordial as part of its global restructuring plan. Citigroup is in the process of scaling back its presence in Japan to order to cope with the global financial crisis.

In December, Nikko Citi Holdings Inc., the principal holding company of Citigroup in Japan, agreed to sell all shares of NikkoCiti Trust and Banking Corp. to Mitsubishi UFJ Trust and Banking Corp., for an all cash consideration of 25 billion yen.

Citigroup, which has been rescued by three U.S. government bailouts, is currently abandoning its acquisition-fueled growth strategy. The company currently intends to get back to its pre-merger looks by slimming-down by a third, in order to return to profitability. Since receiving the government bail-out, the company has been urged to take steps to drastically shrink.

In February, Citigroup announced a deal with the U.S. government that allows the government to exchange up to $25 billion in bailout money for a bigger stake in the bank. As per the deal, the U.S. government will own about 36% of Citi's outstanding common stock and existing shareholders will own nearly 26% of the outstanding shares.

In the wake of current economic conditions, Citigroup has been implementing various cost cutting measures and shedding unwanted flab. The company is also pulling out some of its operations in order to focus on its core financial services competencies.

C declined $0.10 or 2.88% and closed Monday's regular trading at $3.37.

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