Mitsubishi UFJ Financial Group Inc. MUFG intends to acquire Japan-based robo-adviser WealthNavi Inc. for nearly ¥99.7 billion ($667 million). This move aligns with MUFG's plans to expand its financial technology (FinTech) capabilities and cater to households going online to invest more.

MUFG is seeking to acquire WealthNavi through a tender offer for ¥1,950 per share and make it a wholly owned unit, according to a company filing on Friday. This represents an 84% premium over the fintech company’s closing price on Thursday.

While many people based in Japan have opted to save assets, the government has been pushing them to invest in financial markets, expanding a tax-free program, known as NISA (Nippon Individual Savings Account, a tax-exempt small investment program in Japan), to reduce the reliance on the public pension system.

In February 2024, MUFG took around a 15% stake in WealthNavi as financial firms increasingly team up with fintech companies to expand their online services. WealthNavi provides online wealth management services, including automated cash transfers to investment products.

Rationale Behind MUFG’s Plans to Acquire WealthNavi

MUFG’s move to acquire WealthNavi aligns with its medium-term plan, in which the company highlighted its focus on digital transformation as one of the key strategies. The company has been making efforts to boost its contact points for digital services for customers and promoted the digitalization of its products and services.

Both companies are determined to contribute to their customers' sound asset-building through a combination of Mitsubishi UFJ’s wide-ranging customer base and product lineup, and WealthNavi’s outstanding capabilities in agile planning and product development.

Per the news in February, when MUFG made a partial investment in WealthNavi, both companies agreed to strengthen their existing collaboration in the robo-advisor business, including Robo-NISA, as well as develop a Money Advisory Platform. The platform will advise customers on financial products based on algorithms and collected customer data, and personal financial management.

MUFG’s Zacks Rank & Price Performance

Over the past six months, MUFG shares have gained 9.9% on the NYSE against the industry’s 9.4% decline.

Image Source: Zacks Investment Research

Currently, MUFG carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Acquisitions Pursued by Other Finance Firms

Last month, The Bank of New York Mellon Corporation BK acquired Archer Holdco, LLC — a leading technology-enabled service provider of managed account solutions to the asset and wealth management industry. 

This move aligns with BK’s inorganic growth strategy to boost its services. Archer provides comprehensive middle and back-office solutions to asset and wealth managers, enabling them to address the managed account needs of institutional, private wealth and retail investors.

In October 2024, Blue Owl Capital Inc. OWL agreed to acquire the business of digital infrastructure fund manager IPI Partners, LLC from an affiliate of ICONIQ Capital and another affiliate of Iron Point Partners for nearly $1 billion.

The deal is expected to be neutral to Blue Owl's earnings in 2025 and somewhat accretive in 2026. OWL will collaborate with an ICONIQ affiliate to drive the company's growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report

Mitsubishi UFJ Financial Group, Inc. (MUFG) : Free Stock Analysis Report

Blue Owl Capital Inc. (OWL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research