Two Japanese banks have agreed terms for a merger that will create the world's largest bank. UFJ bank plans to join forces with Mitsubishi Financial Holdings. This report from Mark Gregory:

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This latest deal is the largest one yet. It is in effect a rescue of the UFJ banking group by a smaller but less indebted rival, Mitsubishi Financial Holdings.

The two organisations announced their intention to merge last year. But negotiations were held up by legal challenges from another bank, the Sumitomo Mitsui group, which also wants to join forces with UFJ.

On Wednesday, a court in Tokyo lifted an injunction won by Sumitomo that prevented merger talks from taking place. Agreement on basic terms was reached within hours of the court's ruling. But Sumitomo may still try and block the merger by mounting a hostile takeover bid for UFJ, which means making the bank's shareholders an offer sufficiently attractive to persuade them to overrule the wishes of the management.

BBC, Mark Gregory

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rebuild
here, develop or improve their financial position

crash
here, collapse

crippling financial problems
here, money difficulties that are so bad that they seriously weaken or damage the banks

merge
join together

less indebted rival
competitors who owe less money (note: this use of the word indebted to mean ‘owing money to someone’ is only used in American English)

legal challenges
questioning the rightness of something through a court of law

lifted an injunction
an injunction is a court order which stops someone from doing something so here, the injunction was ended

block
stop

hostile takeover bid
an attempt to buy another company without agreement from that company

overrule
decide against something already agreed by official power

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