The SoftBank Corporation of Japan has agreed to purchase a seventy percent stake in the Sprint-Nextel Corporation for about $20.1 billion dollars. The deal, which is expected to give Sprint an infusion of cash, will be the largest ever foreign purchase from a Japanese company. $8 billion worth of shares will be purchased directly from Sprint, while the other $12.1 billion will be grabbed on the market. With regulatory setbacks and traditional due process, the deal is expected to close in mid-2013.
An infusion of cash is likely to help Sprint bolster its relatively weak network offering in the United States. Next to competitors Verizon and AT&T, Sprint has a fewer number of 4G LTE covered cities and a weaker 3G offering. Sprint expects to be more competitive over the coming years with a massive financial push towards LTE buildout.
With T-Mobile’s recent MetroPCS merger, the American telecommunications market will likely see increased competition. New influxes of cash will assist the two smaller networks in their quest to upend AT&T and Verizon. SoftBank CEO Masayoshi Son sees the buyout as a risk worth taking. With AT&T and Verizon closing in on a market duopoly, they have more to lose while Sprint has more to gain.
[heading]SoftBank Facts and Figures[/heading]
[quote]SoftBank was the only Japanese carrier of the Apple iPhone until the release of the iPhone 4S in 2011.[/quote]
[quote]SoftBank’s Sprint purchase will be the largest foreign acquisition in Japanese history.[/quote]
[quote]SoftBank is market valued at about 2.65 trillion yen, according to Bloomberg.[/quote]
[quote]SoftBank introduced a Disney-themed Android device this month (October 2010) with a 720p 4.5-inch display, 1.5 GHz Snapdragon S4 Pro, and 13-megapixel camera.[/quote]
[quote]SoftBank launched a plethora of competitive Android handsets in 2012, including Sharp’s Aquos Phone Xx 106SH, Fujitsu’s Arrows A 101F, and Sharp’s Pantone 5 107SH.[/quote]