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

    Video Twists and Turns Aplenty in US Presidential Race

    Even as Americans pause for this week’s Memorial Day holiday, much attention is focused on the presidential contest

    Iran Orders Social Media Sites to Store Data Inside Country

    New requirements are expected to affect the instant messaging app Telegram, which has more than 20 million users inside Iran

    The Struggle With Painkillers: Treating Pain Without Feeding Addiction

    'Wonder drug' pain medications have turned out to be major problem: not only do they run high risk of addicting the user, but they can actually make patients' chronic pain worse, US CDC says

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora