Jefferies and SMBC Group Form Strategic Partnership to Drive Growth

Jefferies Financial Group, Inc., the parent company of Jefferies Group LLC (“Jefferies Group”) (collectively referred to as “Jefferies”), and Sumitomo Mitsui Financial Group, Inc., Sumitomo Mitsui Banking Corporation, and SMBC Nikko Securities Inc. (collectively referred to as “SMBC Group”) announced today a Strategic Alliance to collaborate on future corpora.

Jefferies and SMBC Group will collaborate on highly accretive growth areas in corporate and investment banking through the Strategic Alliance. These activities are designed to strengthen both firms' existing businesses and improve each firm's capacity to meet the needs of its clients. Among other things, Jefferies and SMBC Group will work collaboratively in the United States leveraged finance business to widen and scale existing offerings; establish a global strategic partnership to strive cross-border M&A opportunities involving Japanese companies; and jointly pursue investment banking, capital markets, and financing possibilities by leveraging all these companies' respective strengths initially in Japan.

SMBC will also provide funding to Jefferies Finance LLC (“JFIN”), Jefferies' leveraged finance underwriting subsidiary, in order to grow JFIN's and Jefferies' leveraged finance origination and underwriting operations, as well as Jefferies Group. SMBC's funding to JFIN includes a $1.65 billion revolving credit facility and a $250 million subordinated loan to enhance JFIN's lending operations, while Jefferies receives a $350 million revolving credit facility.

SMBC Group intends to strengthen its relationship with Jefferies by acquiring up to 4.9 percent of Jefferies Financial's publicly traded shares of common stock in the open market, representing an approximately $386 million equity investment premised on the closing stock price as of July 13, 2021, subject to Hart Scott Rodino clearance.

“We are thrilled and excited to engage into this Alliance with SMBC Group and to receive their support for Jefferies' continuing development and momentum,” said Rich Handler, CEO of Jefferies, and Brian Friedman, President of Jefferies. We think that the Alliance will bolster our existing strong Investment Banking and Capital Markets capabilities. We see the Alliance as the start of a long-term partnership with SMBC Group, and we look forward to many years of collaboration on many facets of our respective businesses in order to best serve our clients. We are very happy to welcome SMBC Group as our newest shareholder.”

Jun Ohta, President and Group CEO of SMBC Group, and Yuichiro Kondo, CEO of SMBC Nikko, stated, "We are pleased to enter into this strategic partnership with Jefferies to help accelerate the growth of both institutions' Corporate and Investment Banking businesses, as well as to enhance our clients' global advisory and product needs." We are excited to collaborate with Jefferies, a worldwide investment banking business that offers a full range of investment and capital markets products and services, and we anticipate great things from the Alliance.”

SMBC Group's financial advisor was Citi, while its legal advisor was Skadden, Arps, Slate, Meagher & Flom LLP. Jefferies Financial and Jefferies Group both received financial advice from Jefferies Group.

About Jefferies Financial Group, Inc.:
Jefferies is the world's biggest independent, worldwide, full-service investment bank located in the United States. Jefferies, which has been servicing customers for almost 60 years, is a market leader in delivering insight, knowledge, and execution to investors, corporations, and governments. In the Americas, Europe, and Asia, the company offers a comprehensive range of investment banking, consulting, sales and trading, research, and wealth management services across all products. Leucadia Asset Management, a part of Jefferies, is a developing alternative asset management platform.

About Sumitomo Mitsui Financial Group, Inc.
SMBC Group is one of Japan's major financial institutions, with a strong presence in all consumer and corporate banking industries. SMBC Group provides a wide variety of financial services through its subsidiaries and affiliates, including commercial banking, leasing, securities, credit cards, consumer financing, and other services. As of March 31, 2021, the consolidated total assets of the SMBC Group were 242.6 trillion.

About Sumitomo Mitsui Banking Corporation
SMBC is a commercial banking company within the SMBC Group and one of the world's largest commercial banks in terms of total assets. It offers a wide variety of corporate and consumer banking services in Japan and throughout the world.

About SMBC Nikko Securities Inc.
SMBC Nikko is a major full-service securities firm in Japan, offering a wide variety of financial products and services to all customer segments through its international network.