- Title: JAPAN: Softbank to buy 70 percent of Sprint for $20 billion.
- Date: 15th October 2012
- Summary: TOKYO, JAPAN (OCTOBER 15, 2012) (REUTERS) ( ** BEWARE FLASH PHOTOGRAPHY **) VARIOUS OF SOFTBANK PRESIDENT MASAYOSHI SON AND SPRINT CEO DAN HESSE ENTERING NEWS CONFERENCE HALL AND SITTING DOWN SON WALKING ON TO STAGE PHOTOGRAPHERS (SOUNDBITE) (Japanese) SOFTBANK PRESIDENT MASAYOSHI SON, SAYING: "We, Softbank, will become 70 percent shareholders of Sprint and the current shareholders will be reduced to 30 percent. Sprint will then become a subsidiary of Softbank." (SOUNDBITE) (Japanese) SOFTBANK PRESIDENT MASAYOSHI SON, SAYING: "Where will this put us in the ranking of global mobile carriers in terms of revenue? It will put us third." SON SPEAKING SON SPEAKING IN FRONT OF PROJECTOR SCREEN READING IN ENGLISH 'WILL THIS INVESTMENT PAY OFF? WE ARE CONFIDENT" HESSE LISTENING TO SON JOURNALISTS LISTENING TO SON (SOUNDBITE) (Japanese) SOFTBANK PRESIDENT MASAYOSHI SON, SAYING: "We will carry out the largest acquisition in Japanese business history. Will we succeed? Let me answer: I am confident." JOURNALISTS WORKING VARIOUS OF HESSE SPEAKING ON STAGE SON LISTENING TO HESSE (SOUNDBITE) (English) SPRINT CEO DAN HESSE, SAYING: "This is pro-competitive, pro-consumer in the United States because it creates a stronger Number 3 to compete with the duopoly of AT&T and Verizon." MORE OF HESSE SPEAKING (SOUNDBITE) (English) SPRINT CEO DAN HESSE, SAYING: "When we look at what Softbank has accomplished in Japan with the Number 3 carrier, it's something that we can learn from. A terrific track record. And we can also learn in terms of deployment of technologies like LTE, LTE-TD, which Softbank has already implemented, we're hoping to implement in the United States." MORE OF HESSE SPEAKING (SOUNDBITE) (English) SPRINT CEO DAN HESSE, SAYING: "Everybody was worried and we were worried about just surviving. As I mentioned, all the metrics were moving in the wrong direction. And I was asked by employees, and have been asked regularly, what are my goals for the company? And my goal has always been the same, and it's to create the best wireless carrier in America." VARIOUS OF SON AND HESSE POSING FOR PHOTOGRAPHS EXTERIOR OF SOFTBANK SHOP IN TOKYO VARIOUS OF SOFTBANK SIGN OUTSIDE SHOP CUSTOMERS ENTERING SHOP DOOR OF SHOP CLOSING MORE OF EXTERIOR OF SHOP SOFTBANK SIGN ON SHOP SOFTBANK LOGO BY POSTER OF IPHONE 5 IN WINDOW OF SHOP
- Embargoed: 30th October 2012 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Economy
- Reuters ID: LVA7JQXO992MI967ULGPA7FTTKEP
- Story Text: Japanese mobile phone operator Softbank says it will buy up to 70 percent of Sprint, the third-largest U.S. carrier, for about $20 billion - the largest overseas acquisition by a Japanese firm in history.
Japanese mobile operator Softbank Corp said on Monday (October 15) it will buy up to 70 percent of Sprint Nextel Corp, the third-largest U.S. carrier, for about $20.1 billion.
The acquisition would be the most a Japanese firm has spent on an overseas acquisition since Japan Tobacco's $19.1 billion purchase of UK tobacco firm Gallaher in 2007.
"We, Softbank, will become 70 percent shareholders of Sprint and the current shareholders will be reduced to 30 percent. Sprint will then become a subsidiary of Softbank," Softbank's billionaire founder and chief Masayoshi Son told a packed news conference in Tokyo.
Combined, Softbank and Sprint will have 96 million users.
"Where will this put us in the ranking of global mobile carriers in terms of revenue? It will put us third," Son said.
The deal, announced jointly with Sprint CEO Dan Hesse, will provide Softbank entry into a U.S. market that still shows growth, while Japan's fast-ageing market is stagnating.
It will also give Sprint the firepower to buy peers and build out its 4G network to compete better in a U.S. market dominated by AT&T and Verizon Wireless, analysts have said.
"This is pro-competitive, pro-consumer in the United States because it creates a stronger Number 3 to compete with the duopoly of AT&T and Verizon," Hesse said.
"When we look at what Softbank has accomplished in Japan with the Number 3 carrier, it's something that we can learn from. A terrific track record. And we can also learn in terms of deployment of technologies like LTE, LTE-TD, which Softbank has already implemented, we're hoping to implement in the United States," he added.
While U.S. analysts have long said the telecoms industry needs consolidation, few have looked to Japan as a catalyst.
But 55-year-old Son, known for his risk-taking, is betting that U.S. growth can offer relief from cut-throat competition for subscribers in Japan's saturated mobile market.
The move could be a risky one for Sprint, but Hesse admitted doing nothing was riskier still.
"Everybody was worried and we were worried about just surviving. As I mentioned, all the metrics were moving in the wrong direction. And I was asked by employees, and have been asked regularly, what are my goals for the company? And my goal has always been the same, and it's to create the best wireless carrier in America," he said.
Analysts have said that Softbank buying a 70 percent stake in Sprint for $20 billion would imply the No. 3 U.S. wireless company was worth about $28.6 billion, some two-thirds greater than its market capitalisation at Friday's close.
The companies said Hesse would remain as CEO of Sprint.
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