Tokyo-Citigroup Inc. announced on Tuesday that it will acquire shares of Nikko Cordial Corp. by triangular merger through Citigroup Japan subsidiary.

Nikko Cordial Corp, Japan's third largest brokerage, will then become a wholly owned unit through a stock swap in a deal valued at $4.42B. It will mark first-ever triangular merger since the nation allowed triangular merger from May.

The U.S. mega-bank will obtain all the shares of Nikko Cordial Corp. Citigroup currently holds a 68.23 percent stake of Nikko.

After completion of triangular merger, Nikko Cordial will be delisted from the Tokyo, Osaka and Nagoya stock exchanges. Nikko admits its shares have been assigned to a supervisory post.

On Tuesday trading, Nikko shares rose 1.2 percent to 1,462 yen($12.2) on the Tokyo Stock Exchange(TSE) before the announcement was made.

It will become the first triangular merger in Japan. In this kind of merger, a foreign company makes use of a local subsidiary to acquire a Japanese company, exchanging the parent company's shares into the buyout target company's shares.

Citigroup is now on the way of applying to list its share on the TSE. As the nation's baby-boomers are close to retiring, the U.S, bank is strengthening its presence in Japan because there seem to be many older generations who are interested in their products.

Japan Citigroup