Mizuho to invest in Rakuten Card, Rakuten to cancel FinTech reorganization

Rakuten Group announced that its consolidated subsidiary Rakuten Card and Mizuho Financial Group have agreed to consider a new strategic capital and business alliance between the two companies.

Since the November 2023 “Announcement Regarding Strengthening of Strategic Capital and Business Alliance between Rakuten Securities Holdings and Mizuho Securities,” Rakuten Securities and Mizuho Securities have been deepening their collaboration to build a new consumer business model that combines both online and offline aspects in the asset formation and asset management fields.

To further accelerate the growth of Rakuten Card, which is the core business of Rakuten’s FinTech operations, the company aims to enhance its collaboration with Mizuho FG. This will allow Rakuten to pursue growth opportunities not only in the robust consumer sector but also in the corporate sector, which is expected to expand in the future. By deepening and expanding the partnership with Mizuho FG, which has a broad customer base, Rakuten believes it can expand the business domain and achieve a sustainable growth for Rakuten Card, as well as further expand and develop the entire Rakuten FinTech Ecosystem centered around Rakuten Card, thereby enhancing corporate value. In addition, after the Alliance, there will be no change in the positioning of Rakuten Card as an important consolidated subsidiary of the Company in forming the Rakuten Ecosystem.

Currently, Rakuten Insurance, a 100% consolidated subsidiary of Rakuten Card, would not be included in the Alliance. Rakuten Insurance will continue to be 100% owned by Rakuten, considering various factors including the fact that it is in the process of strengthening collaboration between the life insurance and general insurance businesses.

At this moment, specific details of the Alliance have not been finalized. Rakuten will promptly disclose any matters that need to be announced in the future.

Rakuten and Rakuten Bank had been in discussion on a reorganization of the FinTech business, as disclosed in the April 2024 “Notice Concerning Execution of a Memorandum of Understanding Regarding Reorganization of Rakuten’s FinTech Business.” This reorganization aimed to contribute to a sustainable growth and an enhancement of corporate value for both Rakuten and Rakuten Bank, with comprehensive consideration of various factors, including legal regulations related to each service in the FinTech business, the interests of minority shareholders of Rakuten Bank, and the optimal group structure to strengthen the FinTech business Ecosystem. Both companies had been advancing the consideration of this reorganization, aiming for it to take effect in January 2025, while comparing various options. However, the companies have concluded that proceeding with this reorganization is not necessarily the best option for further expansion of the FinTech Ecosystem and enhancing its competitive advantages. Therefore, the companies have decided to cancel this reorganization.

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