Sumitomo Trust and Banking Co. announced Thursday that it will buy up to 98.55% of Citigroup Inc.'s Japanese unit, Nikko Asset Management, for $1.2 billion.

The deal would make Sumitomo one of the largest players in the global asset management business and is expected also to help shore up Citi's balance sheet.

Nikko, Japan's third-largest asset management company, has more than 500 employees globally and manages about $95.1 billion.

The deal, which is expected to close Oct. 1, would boost Sumitomo Trust's assets under management to about $370 billion.

Sumitomo said that it plans to take Nikko Asset Management public, possibly in a few years.

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