The Sumitomo Mitsui capital alliance and a ¥8bn share allotment (2015)

Keeping a distance of 3.36%

What stands out in this alliance is how little stock the bank was given. Sumitomo Mitsui Banking Corporation ended up with 3.36%, while parent GMO Internet held 51.65%. The capital relationship was kept thin while the substance of the business was moved into a separate joint venture — and in that joint venture the bank, conversely, held 80%. It was an allocation in which neither side had to hand the other the initiative, and the weight of the alliance sat not in the shares but in the merchants the joint venture would handle.

Part of the design was later rewritten. The original understanding that GMO Payment Gateway would raise its holding to 49% from the second year onward never happened; a capital restructuring in April 2021 left it with 40%, with Sumitomo Mitsui Card taking the top position at 50%. Seven years after the alliance, in the year ended September 2022, the parent company’s consolidated revenue had grown to ¥50.29 billion. What it gained by teaming up with a bank was not votes in a joint venture but a position within reach of the payment flow, face-to-face payment included.