Softbank will purchase a stake of 70% in Sprint Nextel for $20.1 billion, which will expand the growth overseas for the third largest operator of mobile phones in Japan. The company is run by billionaire businessman Masayoshi Son.
In the deal, Softbank will pay $12.1 billion to shareholders of Sprint and $8 billion will be used for new capital, said a spokesperson for Softbank. Experts believe the acquisition is the largest foreign investment by a Japanese company in over a decade.
Softbank will now have entrance into the wireless market in the U.S. and capture growth that for the most part has disappeared in the Japanese market because of oversaturation.
Together the company would have over 96 million users worldwide and be the third largest mobile phone provider in the world by revenue. Softbank is scheduled to purchase about 55% of the Sprint shares that are existing for $7.30 per share a premium of 22% over last Friday’s closing price. In premarket trading on Monday, Sprint shares jumped over 3%.
Son is the founder of Softbank and a successful entrepreneur who made his fortune during the Web valuations that took place in the late ‘90s. When the bubble finally burst in early February of 2000, Son had a net worth of close to $69 billion. Today he is worth an estimated $7.2 billion.
Dan Hesse, the current CEO of Sprint will remain at the helm and was present when the deal was announced.
