SoftBank Group Corp.’s payments unit is buying the life insurance unit of T&D Holdings Inc. for ¥134.3 billion ($840 million) to broaden its offerings and better compete in Japan’s ballooning fintech market.
PayPay Corp., Japan’s dominant payments app, said it will take a 70.2% stake in privately held T&D Financial Life Insurance Co. in a deal expected to close in October of next year. One Investment Management’s OneIM Indigo will acquire a 14.9% stake.
A unit of SoftBank’s telecom unit, PayPay is angling for a bigger slice of Japanese households’ near $15 trillion in financial assets. Consumers are spending more time online, spurring double-digit growth in fintech revenues across the industry.
The company, which made its market debut in New York in March, is seeking to make further inroads into asset management, according to a release.
Launched in 2018, PayPay has amassed more than 70 million users, gaining ground against rivals like e-commerce heavyweight Rakuten Group Inc.’s Rakuten Pay through heavy marketing, aggressive subsidies and SoftBank’s support in signing on merchants.
But Rakuten has a deeper reach through its online marketplace, cash-generating bank and securities arms, and capital tie-up with Mizuho Financial Group Inc.
Under the agreement, T&D has an option to sell its remaining 14.9% stake in the life insurer three years after the deal is closed.
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