Japanese Carrier Softbank Acquires 70% Stake In Sprint For $20.1 Billion

Softbank Sprint

As reported last week, Japanese carrier Softbank has acquired a 70% stake in Sprint Nextel – the third largest carrier in the US for $20.1 billion. It’s the most a Japanese company has spent on an acquisition.

Softbank will buy $8 billion in shares directly from Sprint, and another $12 billion from existing stakeholders at $7.30 per share, which works out to a premium of 27% premium from Friday’s close.

The deal was announced at a news conference in Tokyo by Softbank’s billionaire founder and chief Masayoshi Son and Sprint CEO Dan Hesse earlier today.

Hesse said the Softbank investment would give Sprint opportunities it hadn’t had since he joined the firm in late-2007. “This is pro-competitive and pro-consumer in the U.S. because it creates a stronger No. 3 … it competes with the duopoly of AT&T and Verizon. When you look at what Softbank has accomplished in Japan with the No. 3 carrier, it’s something we can learn from,” he said. [..]

[..] Son acknowledged that a move for Sprint was risky, but he said doing nothing was riskier still.

“It could be safe if you do nothing and our challenge in the U.S. is not going to be easy at all. We must enter a new market, one with a different culture, and we must start again from zero after all we have built,” he told the news conference.

“But not taking this challenge will be a bigger risk,” he said, adding his firm needed to break out of Japan’s fast-ageing domestic market.

Softbank was Apple’s exclusive iPhone carrier partner in Japan until last year, whereas Sprint started offering Apple’s iPhone only from last year.

Sprint has been lagging behind Verizon and AT&T with regards to 4G LTE coverage, so the multibillion-dollar cash injection should also help the company to roll out its 4G LTE network a lot faster than it had planned.

[via Reuters]

Categories: Carriers, iPhone News, Softbank, Sprint, Sprint iPhone

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  • Janus

    Japanese carrier Software > Softbank

    • http://www.iphonehacks.com iPhoneHacks

      Oops :) It has been fixed

  • Jay

    Sooooo, now we have to learn Japanese instead of Arabic to talk to customer service??

    • http://rounak.me/ Rounak Jain

      Arabic? Customer service is an Indian stereotype, not Arabic, as far as I know

  • http://www.facebook.com/1stClass Classic A Lew

    I’m happy about this because the update to the LTE should come a lot faster

  • Kimk69

    I don’t know. To me it’s easy what Sprint needs to do to make money right now. Get the LTE working. I would love to get the hell away from AT&T and screw Verizon too, and go with Sprint. But the data network is just garbage right now. As soon as they get that going I’m gone. AT&T can take my unlimited/3Gigs of data and choke on it. Oh wait, they actually surprised the hell out of me and raised the unlimited LTE to 5 Gigs. Couldn’t believe that but did make me happy but now we can’t use FaceTime. What the hell AT&T. Anyway, I will be gone when Sprint gets the data working. Like AT&T gives a sh**. :(

  • bubba

    Wake up American. The bigger question is how do we stop espionage now that they are setup inside the US infrastructure. Trojan horse.