OREANDA-NEWS. August 01, 2011. 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”) hereby announce that they have determined, at their respective meetings of the board of directors, the basic policies for conducting a merger between MHSC and MHIS (the “Merger”), on the assumption that (i) a share exchange, in which shares of common stock of MHFG shall be allotted as consideration, in order to make MHBK a wholly-owning parent and to make MHIS a wholly-owned subsidiary (effective date of share exchange: September 1, 2011 (scheduled)), and a share exchange, in which shares of common stock of MHFG shall be allotted as consideration, in order to make MHCB a wholly-owning parent and to make MHSC a wholly-owned subsidiary (effective date of share exchange: September 1, 2011 (scheduled)) (both of which shall hereinafter be separately referred to as the “Share Exchange”), will respectively become effective; and (ii) the Merger will have been approved at the general meeting of shareholders of each company, and among other things, filings will have been made to, and permission obtained from, the relevant authorities in Japan and any foreign countries, in each case which are required for the Merger, and MHSC and MHIS signed a memorandum of understanding (the “MOU”) for further consideration and discussion of the details as described below, reported the press-centre of Mizuho Financial Group.

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 structures 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.”

In addition, MHSC, MHIS and Mizuho Trust & Banking Co., Ltd. (“MHTB”) are scheduled to be turned into wholly-owned subsidiaries of MHFG in September 2011, and thereby Mizuho will further enhance 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.

The Merger is intended, 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 function 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 collaborations 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 base 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.

With reference to The Norinchukin Bank (“Norinchukin”), which currently has a capital relationship with MHSC, Norinchukin and MHCB, with a view to, after the completion of the Share Exchange, expanding the areas of business cooperation and further enhancing the collaborative relationship between Norinchukin and MHSC, as well as maintaining the capital relationship between Norinchukin and MHSC by way of the transfer of a portion of the shares of MHSC owned by MHCB to Norinchukin or by way of other methods (the “Transaction”), agreed, and signed a letter of intent on May 30, 2011, to engage in further discussion, etc., toward entering into a series of legally binding agreements that provide the details and methods or other necessary matters related to the Transaction, on September 1, 2011, after the Share Exchange (for details, please see the “Letter of Intent (the “LOI”) on Expansion of Areas of Business Cooperation, Enhancement of a Collaborative Relationship and Maintenance of the Capital Relationship between The Norinchukin Bank and Mizuho Securities Co., Ltd.” Publicly announced by MHFG, MHCB and Norinchukin on May 30, 2011).