Signing of Merger Agreement between Mizuho Securities Co., Ltd. and Mizuho Investors Securities Co., Ltd.

Mizuho Financial Group, Inc. (President & CEO: Yasuhiro Sato) ("MHFG"), Mizuho Bank, Ltd. (President & CEO: Takashi Tsukamoto) ("MHBK"), Mizuho Corporate Bank, Ltd. (President & CEO: Yasuhiro Sato) ("MHCB"), Mizuho Securities Co., Ltd. (President & CEO: Hiroshi Motoyama) ("MHSC") and Mizuho Investors Securities Co., Ltd. (President & CEO: Katsuyoshi Ejima) ("MHIS") announced on July 29, 2011 in the release titled "Memorandum of Understanding on Merger between Mizuho Securities Co., Ltd. and Mizuho Investors Securities Co., Ltd." that MHFG, MHBK, MHCB, MHSC and MHIS determined a basic policy for conducting a merger between MHSC and MHIS (the "Merger"), and have been proceeding with consideration and discussions on the details of the Merger.

MHFG, MHBK, MHCB, MHSC, and MHIS hereby announce that, based on the further consideration and discussions mentioned above, and with the approval of their respective board of directors meetings held today, MHSC and MHIS have signed a merger agreement (the "Merger Agreement").

In addition, the scheduled effective date of the Merger (the "Scheduled Date of the Merger") shall be January 4, 2013 on the assumption that the Merger will have been approved at the general meeting of shareholders of each company, and among other things, filings will be made to, and permission will be obtained from, the relevant authorities in Japan and any relevant foreign countries, in each case which are required for the Merger.

1. Purpose of the Merger

MHFG announced the Transformation Program as the Medium–term Management Policy of our group ("Mizuho") in May 2010, in order to respond promptly and appropriately to the new business environment that surrounds financial institutions, including changes in economic and social structure and revisions of international financial supervision and regulations after the global financial crisis. Mizuho has conducted a fundamental review of the management challenges it faces, and the entire group is now implementing measures to achieve sustainable growth through initiatives for further enhancement of three areas: "profitability," "financial base" and "front–line business capabilities," while pursuing the group's "customer first policy."

MHSC, MHIS, and Mizuho Trust & Banking Co., Ltd. (hereinafter "MHTB") were turned into wholly–owned subsidiaries of MHFG in September 2011, and thereby Mizuho has further enhanced the "group collective capabilities" by integrating group–wide business operations, optimizing management resources, such as workforce and branch network, and accelerating the implementation of the Transformation Program.

In addition, as announced on January 20, 2012 in the release titled "Transformation into "Substantive One Bank" Structure — Organizational Change of Mizuho Financial Group, Mizuho Bank and Mizuho Corporate Bank —," Mizuho aims to further improve customer convenience by establishing a new corporate structure and corporate governance structure, and has taken measures to realize the synergies generated from the merger of MHBK and MHCB as soon as possible under the "Substantive One Bank" structure, which was implemented in April 2012.

The Merger is intended, as part of the previously mentioned new corporate structure, in the securities business, to enhance the retail business in Japan, rationalize and streamline management infrastructure, and provide securities functions in a unified manner through the group's full–line securities company. Specifically, the Merger aims to (i) further enrich and expand customer services through strengthening functions and increasing its external presence as a full–line securities company and investment bank, by gathering the strengths of both MHSC, which is a leading company in the investment banking business (wholesale/institutional markets) and simultaneously has a nation–wide customer base in middle/retail markets, and MHIS, which has an industry–leading level branch network in the middle/retail markets established through its collaboration with MHBK and MHTB and also a nation–wide customer base; (ii) achieve the goal of becoming a full–line securities company with one of the largest customer bases in Japan through flexible and efficient collaboration with MHBK and MHCB, both of which have a solid customer base; and (iii) realize streamlined corporate management units and thorough low–cost management by, among other things, consolidation of, in addition to branch networks, overlapping business areas such as corporate planning and management units and domestic business promotion units, and integration of core IT systems; thereby converting to a strong management structure.

2. Summary of the Merger

(1) Schedule of the Merger

Mizuho is planning to conduct the Merger on January 4, 2013 on the assumption that the Merger will be approved at the general meeting of shareholders of each company, and among other things, filings will be made to, and permission will be obtained from, the relevant authorities in Japan and any relevant foreign countries, in each case which are required for the Merger.

(2) Method of the Merger

MHSC will be the surviving company in the Merger, and MHIS will be the dissolving company in the Merger.

(3) Outline of New Company

(4) Preparations for Scheduled Date of the Merger

A "Merger Preparation Committee" has been established to facilitate preparations for the Merger under the co–chairmanship of the presidents of MHSC and MHIS. Sub–committees established under the Merger Preparation Committee are conducting individual merger preparations such as the planning, human resources, financial control and accounting, IT systems, risk management, compliance, internal audit and front office functions.

3. Outlook

Consolidated earnings estimates for MHFG for Fiscal 2012 are available in "Financial Statements for Fiscal 2011" released today.

With the Merger, we will work to increase profits by, among other things, further enhancing "group collective capabilities" through building and enriching a functional and efficient framework for collaboration among the banking, trust and securities functions. We will reduce expenses across the board by consolidating overlapping business areas such as corporate planning and management units and domestic business promotion units, consolidating branch networks, integrating core IT systems and implementing other measures such as efficient allocation of personnel. As a result of these efforts as well as an increase in profits, we will aim to achieve synergy effects in the region of 20 billion yen (quantitative effects (estimation) for Fiscal 2015 compared to Fiscal 2011).

PDF for print(PDF/48KB)