News / Asia

    Largest Acquisition by a Japanese Company Announced

    Softbank Corp President Masayoshi Son (L) shakes hands with Dan Hesse, president and CEO of the Sprint Nextel Corporation, in Tokyo, October 15, 2012.
    Softbank Corp President Masayoshi Son (L) shakes hands with Dan Hesse, president and CEO of the Sprint Nextel Corporation, in Tokyo, October 15, 2012.
    Mobile phone service provider Softbank has announced what would be the largest-ever foreign acquisition by a Japanese company. It intends to purchase Sprint, the number three telecommunications company in the United States, in a $20 billion deal.  

    Softbank's acquisition of Sprint will create one of the world's largest telecommunications operators.

    Both are number three in their respective markets and the combination will create a trans-Pacific company with more than 90 million customers.

    The deal, approved by the boards of both companies, was officially unveiled at a hastily-arranged news conference in the Japanese capital.

    Softbank is to purchase 70 percent of Sprint Nextel Corporation in a deal financed by three Japanese financial groups and Deutsche Bank.

    Softbank founder Masayoshi Son acknowledged it is a risky deal, saying it would only be safe if he did nothing.

    Son said the challenge in the United States will not be easy. But his company must enter a new market, one with a different culture and start again from zero after all that it has built.

    Son said he will assume the chairmanship of Sprint, which will be a Softbank subsidiary, but said he wants Sprint's chief executive officer Dan Hesse to stay in his job.

    Hesse took over Sprint five years ago. “My goal has always been the same," he said. "And it is to create the best wireless carrier in America. I believe without question that we are going to get there and the catalyst to get there is our partnership with Softbank.”

    The two companies have a combined debt of $25 billion. The ratings-firm Moody's immediately announced it was looking at downgrading Softbank's credit rating.

    Shareholder concern about the deal sent Softbank shares tumbling more than five percent in Tokyo trading. Softbank has lost a fifth of its value, or nearly $9 billion, since news of the deal first leaked last week. But Sprint's stock price has gone up.  

    Softbank said the deal, following shareholder approval and regulatory review, is expected to be completed by the middle of next year.

    Analysts said it makes sense for Softbank to go abroad because of market stagnation in Japan, which has a declining and aging population. The U.S. telecommunications market, on the other hand, is expanding.

    Sprint, which has been losing money for years, is in a fierce battle for U.S. market share behind AT&T and Verizon.

    The 55-year-old Son, known as a maverick in the Japanese business world, is an ethnic Korean who grew up poor in western Japan before moving to the United States at the age of 16 to finish high school. He is now one of the richest people in Japan.

    Over the past couple of decades he has led a series of high-profile acquisitions and investments, including with Yahoo Japan, Vodafone Japan and the Chinese e-commerce company Alibaba.

    But previous attempts by Japanese telecoms players to venture abroad have not gone well.  Industry giant NTT Docomo incurred huge losses with investments in AT&T Wireless and KG Telecom of Taiwan.

    Steve Herman

    A veteran journalist, Steve Herman is VOA's Southeast Asia Bureau Chief and Correspondent, based in Bangkok.

    You May Like

    Vietnam Urges US to Lift Lethal Weapons Ban Amid S. China Sea Tensions

    US president’s upcoming visit to Vietnam underscores strength of relationship, and lifting embargo would reflect that trust, ambassador says

    Are US Schools Turning a Blind Eye to Radical Qatari Preachers?

    Parade of radical Islamist clerics using mosque at Qatar’s Education City draws mounting criticism for American universities that maintain satellite branches there

    Why Islamic State Is Down But Not Out

    Despite loss of territory, group’s ferocious attacks over past three months seen as testimony to its continued durability and resourcefulness

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Displaced By War, Syrian Artist Finds Inspiration Abroadi
    X
    May 02, 2016 1:36 PM
    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video Kurdish Football Team Helps War-Torn City Cope

    With the conflict still raging across much of Turkey’s predominantly Kurdish southeast, between the rebel PKK and the Turkish state, many Kurds are trying to escape the turmoil by focusing on the success of their football team Amedspor in Diyarbakir. The club is increasingly becoming a symbol for Kurds, not only in Diyarbakir but beyond. Dorian Jones reports from southeast Turkey.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.
    Video

    Video Pakistani School Helps Slum Kids

    Master Mohammad Ayub runs a makeshift school in a public park in Islamabad. Thousands of poor children have benefited from his services over the years, but, as VOA's Ayesha Tanzeem reports, roughly 25 million school-age youths don't get an education in Pakistan.
    Video

    Video Florida’s Weeki Wachee ‘Mermaids’ Make a Splash

    Since 1947, ‘mermaids’ have fascinated tourists at central Florida’s Weeki Wachee Springs State Park with their fluid movements and synchronized ballet. Performing underwater has its challenges, including cold temperatures and a steady current, as VOA’s Lin Yang and Joseph Mok report.
    Video

    Video Somali, African Union Forces Face Resurgent Al-Shabab

    The Islamic State terror group claimed its first attack in Somalia earlier this week, though the claim has not been verified by forces on the ground. Meanwhile, al-Shabab militants have stepped up their attacks as Somalia prepares for elections later this year. Henry Ridgwell reports there are growing frustrations among Somalia’s Western backers over the country’s slow progress in forming its own armed forces to establish security after 25 years of chaos.
    Video

    Video Documentary Tells Tale of Chernobyl Returnees

    Ukraine this week is marking the 30th anniversary of the world's worst nuclear accident, at the Chernobyl nuclear power plant. Soviet officials at first said little about the accident, but later evacuated a 2,600-square-kilometer "exclusion zone." Some people, though, came back. American directors Holly Morris and Anne Bogart created a documentary about this faithful and brave community. VOA's Tetiana Kharchenko reports from New York on "The Babushkas of Chernobyl." Carol Pearson narrates.
    Video

    Video Nigerians Feel Bite of Buhari Economic Policy

    Despite the global drop in the price of oil, Nigerian President Muhammadu Buhari has refused to allow the country's currency to devalue, leading to a shortage of foreign exchange. Chris Stein reports from Lagos businessmen and consumers are feeling the impact as the country deals with a severe fuel shortage.
    Video

    Video  Return to the Wild

    There’s a growing trend in the United States to let old or underused golf courses revert back to nature. But as Erika Celeste reports from one parcel in Grafton, Ohio, converting 39 hectares of land back to green space is a lot more complicated than just not mowing the fairway.

    Special Report

    Adrift The Invisible African Diaspora