Japanese mobile operator Softbank Corp said it will buy about 70 per cent of Sprint Nextel,the third-largest US carrier,for $20.1 billion the most a Japanese firm has spent on an overseas acquisition.
The deal,announced by Softbanks billionaire founder and chief Masayoshi Son and Sprint CEO Dan Hesse at a packed news conference in Tokyo on Monday,gives Softbank entry into a US market that is still growing,while Japans market is stagnating.
It also gives Sprint the firepower to buy peers and build out its 4G network to compete in a market dominated by AT&T and Verizon Wireless .
Shares in one of those potential targets,Clearwire Corp ,surged nearly 16.3 per cent to $2.70 in early trading.
Sprint owns 48 per cent of Clearwire. While Softbank said no action was required,most analysts and investors see a Sprint-Clearwire tie-up as an inevitable consequence of the Softbank deal.
Analysts have long said the US teleco industry needs to consolidate but few looked to Japan as a catalyst. Some investors worried that Softbank is biting off more than it can chew. But the 55-year-old Son is betting US growth can offer relief from cut-throat competition in Japans saturated mobile market.