japanese banking battle at an end japan s sumitomo mitsui financial has withdrawn its takeover offer for rival bank ufj holdings enabling the latter to merge with mitsubishi tokyo sumitomo bosses told counterparts at ufj of its decision on friday clearing the way for it to conclude a 3 trillion yen 29bn deal with mitsubishi the deal would create the world s biggest bank with assets of about 189 trillion yen 18 trillion sumitomo s exit ends the most high profile fight in japanese bank history ufj holdings japan s fourthlargest bank has been at the centre of a fierce bid battle over the last year sumitomo japan s thirdlargest bank tabled a higher offer for ufj than its rival valuing the company at 35bn however ufj s management was known to prefer the offer from mitsubishi tokyo financial group mtfg japan s secondlargest bank concerns were also raised about sumitomo s ability to absorb ufj and the former has now admitted defeat we believe the market and most investors accept a ufjmtfg merger sumitomo said in a statement given the ongoing integration of ufj and mtfg operations persisting with our proposal may not be in the best interests of our shareholders or ufj s mitsubishi s takeover of ufj which will be japan s largestever takeover deal will still have to be approved by shareholders of the two firms however this is expected to be a formality sumitomo may now turn its attention to deepening its ties with daiwa securities another japanese financial firm the two are set to merge their venture capital operations and there has been speculation that this could lead to a fullblown merger japanese banks are increasingly seeking alliances to boost profits