Japan's SoftBank to Buy 70 Percent Stake in Sprint Nextel for $20.1 Billion
Japanese telecom giant SoftBank has agreed to buy a 70 percent stake in U.S. mobile company Sprint Nextel for $20.1 billion in what the companies said would be the biggest overseas acquisition on record by a Japanese company.
Japan's third-largest cell phone provider gets to enter the U.S. to diversify its revenue stream beyond Japan, while Sprint gets cash that it can use to compete with its larger U.S. rivals AT&T and Verizon.
SoftBank chairman and CEO Masayoshi Son said the deal would help "drive the mobile Internet revolution in one of the world’s largest markets." He didn't immediately outline detailed plans for the firm's mobile online strategy, which could affect content companies that are increasingly seeing content consumption via smartphones and tablets.
"SoftBank’s cash contribution, deep expertise in the deployment of next-generation wireless networks and track record of success in taking share in mature markets from larger telecommunications competitors are expected to create a stronger, more competitive New Sprint that will deliver significant benefits to U.S. consumers," the companies said.
The deal is expected to close in mid-2013 and is subject to Sprint shareholders' and regulatory approval.
“This transaction provides an excellent opportunity for SoftBank to leverage its expertise in smartphones and next-generation high speed networks, including LTE, to drive the mobile Internet revolution in one of the world’s largest markets," Son said. "As we have proven in Japan, we have achieved a v-shaped earnings recovery in the acquired mobile business and grown dramatically by introducing differentiated products to an incumbent-led market. Our track record of innovation, combined with Sprint’s strong brand and local leadership, provides a constructive beginning toward creating a more competitive American wireless market."
Sprint CEO Dan Hesse will retain his job.