Rakuten to raise $ 2.2 billion from Walmart, Tencent and Japan Post

Rakuten Inc. Chairman and CEO Hiroshi Mikitani delivers a speech during Rakuten Optimism 2019 on July 31, 2019 in Yokohama. Japan.

Tomohiro Ohsumi | Getty Images News | fake images

Japanese tech giant Rakuten plans to raise $ 2.2 billion to help it compete with its American rivals.

The company announced on Friday that it will issue 211,656,500 shares at 1,145 Japanese yen ($ 10.5) per share.

The national postal service Japan Post is expected to buy 131,004,000 shares for an 8.3% stake, Chinese internet firm Tencent is expected to acquire 57,382,900 for a 3.6% stake, and US retailer Walmart is expected to acquire 14,536,000 shares for a 0.9% stake.

The payment date will be between March 29 and April 30.

Hiroshi Mikitani, Founder, President and CEO of Rakuten, said in a statement: “These new investments in Rakuten indicate high expectations for the growth and impact of the Rakuten ecosystem with mobile service at its core, as well as great potential for greater collaboration with leading companies in the world’s three main economies. “

Founded in 1997, Rakuten has more than 70 companies and 1.4 billion members worldwide. Rakuten Ichiba is one of the largest e-commerce sites in Japan, but the market value of Rakuten is $ 16.5 billion. Meanwhile, Amazon is valued at more than $ 1.5 trillion.

Rakuten is also known for its video streaming service Rakuten TV. In recent years, Rakuten has acquired several companies, including the Viber messaging app and the Kobo e-book platform.

At a press conference on Friday, Mikitani reportedly said that Rakuten faces extremely powerful technological forces led by GAFA (Google, Amazon, Facebook and Apple).

Rakuten and Japan Post plan to partner in logistics, mobile and payments businesses, while there is also the possibility of alliances with Tencent.

“The new potential to partner with Tencent opens up a broad portfolio of opportunities, from digital entertainment, including online games, to e-commerce,” Mikitani said in a statement. “We are also excited to have Walmart’s financial commitment as they continue to invest in the future of retail.”

Martin Lau, CEO and President of Tencent, said in a statement: “Rakuten has built a vibrant ecosystem through its membership and loyalty program, extending its unrivaled strength from e-commerce to FinTech and digital content.”

“Tencent shares Rakuten’s aspiration to create value through innovation and empowerment of users and partners. We are excited to invest in Rakuten, supporting its evolution into a global innovation leader. We look forward to strategic cooperation across all activities, including digital entertainment and e-commerce, creating value for users and building the Internet ecosystem together. “

Rakuten shares rose more than 8% to 1,142 Japanese yen on the Tokyo market on Friday.


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