Rakuten Inc. President and CEO Hiroshi Mikitani delivers a speech during Rakuten Optimism 2019 on July 31, 2019 in Yokohama. Japan.
Tomohiro Ohsumi | Getty Images News | Getty Images
Japanese technology giant Rakuten plans to raise $ 2.2 billion to help it compete with its American rivals.
The company announced Friday that it will issue 211,656,500 shares at 1,145 Japanese yen ($ 10.5) per share.
Japan Post national postal service is expected to buy 131,004,000 shares for a 8.3% stake, Chinese internet firm Tencent is expected to take 57,382,900 for a 3.6% stake and that U.S. retailer Walmart will take 14,536,000 shares for a 0.9% share.
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 both high expectations about the growth and impact of the Rakuten ecosystem with the mobile service as the core, as well as great potential for greater collaboration with leading companies in the world’s three major 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 Rakuten’s market value is $ 16.5 billion. Meanwhile, Amazon is worth more than $ 1.5 trillion.
Rakuten is also well known for its Rakuten TV video streaming service. In recent years, Rakuten has acquired several companies, including Viber messaging apps and the Kobo e-book platform.
At a press conference on Friday, Mikitani said Rakuten faces the extremely powerful technological forces led by GAFA (Google, Amazon, Facebook and Apple).
Rakuten and Japan Post plan to collaborate on logistics, mobile and payment companies, while there is also the possibility of partnering with Tencent.
“The new potential to partner with Tencent opens up a wide portfolio of opportunities, from digital entertainment, including online gaming, 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, expanding its unmatched strength from e-commerce to FinTech and digital content.”
“Tencent shares Rakuten’s aspiration to create value through innovation and empowerment for users and partners. We are excited to invest in Rakuten, supporting its evolution towards a global leader in innovation. We look forward to pursuing cooperation between activities such as digital entertainment and e-commerce, creating value for users and building the Internet ecosystem together. “
Shares of Rakuten rose more than 8% to 1,142 Japanese yen in the Tokyo market on Friday.