State Street Corp. STT has agreed to acquire global custody and related businesses outside of Japan from Mizuho Financial Group, Inc. MFG. These businesses aid the international investments of Mizuho’s Japanese clients.

The financial terms of the deal have not been disclosed. The deal is anticipated to be completed by the fourth quarter of 2025, subject to requisite regulatory and other customary closing approvals.

Details of the Deal Pursued by STT & MFG

Mizuho Financial conducts its global custody and related operations outside Japan via its local subsidiaries, Mizuho Trust & Banking (Luxembourg) S.A., which is owned by Mizuho Trust & Banking Co., Ltd., and Mizuho Bank (USA), a wholly owned subsidiary of Mizuho Bank, Ltd.

Following the completion of the deal, STT will partner with Mizuho Financial to support its Japanese clients with global custody and related services. Meanwhile, MFG will continue to offer trust and custody services for domestic assets within Japan, capitalizing on its expertise and network.

Stefan Gmür, head of Asia Pacific and Strategic Business Growth at State Street, said, “Japan, Luxembourg and the United States are all important markets to State Street. This transaction demonstrates our strong commitment to further accelerating our growth in these markets.”

State Street’s Rationale Behind the Takeover From Mizuho

State Street has been doing business in Japan for more than 35 years, with a proficient team of more than 500 employees across Tokyo and Fukuoka. It offers a comprehensive suite of services such as trust, global custody, outsourcing, data management, trading and financing to institutional investors. Its Fukuoka center has aided clients in Japan and the Asia Pacific for more than a decade.

In Luxembourg, where it has been present for 35 years, State Street provides fund administration, custody and transfer agency services. Hiroshi Kobayashi, head of Japan at State Street, stated, “Having deep familiarity with the requirements and expectations of Japanese institutional investors, we look forward to meeting their needs not only in global custody but also data management, risk and performance analytics, currency management and securities finance.”

This move aligns with the company’s efforts to expand its presence in strategically important and familiar markets, boosting its revenues and scale and optimizing its global operations. Last week, STT announced the restructuring of its joint venture arrangement in Luxembourg and Ireland. In November 2024, the company collaborated with Bridgewater Associates to boost its core alternative investment strategies.

Shares of STT have gained 15.5% compared with the industry’s 10.8% growth in the past six months.

Image Source: Zacks Investment Research

STT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Expansion Efforts by Another Finance Firm

Last month, JPMorgan JPM announced an additional $50 billion allocation toward direct lending, solidifying its presence in the lucrative private credit market. The move, unveiled at its 30th annual Global Leveraged Finance Conference, signals the company’s intent to become a dominant force in private credit.

By integrating private credit solutions within its existing banking relationships, JPM is well-positioned to capitalize on the convergence of syndicated and direct lending markets, offering clients greater flexibility and financing options.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

State Street Corporation (STT) : Free Stock Analysis Report

Mizuho Financial Group, Inc. (MFG) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research