On October 15th, Beijing time, Softbank announced on Monday that it will acquire 70% of the shares of Sprint Nextel (hereinafter referred to as "Sprint"), the third largest mobile operator in the United States, for approximately US $ 20.1 billion.
On Monday, Softbank founder and CEO Sun Zhengyi and Sprint CEO Dan Hesse (Dan Hesse) jointly announced the news that the transaction will allow Softbank to enter the rapidly growing US mobile market. In contrast, Japan's mobile phone business has been relatively saturated and is in a state of stagnation.
Analysts also said that at the same time, the transaction will give Sprint greater firepower to acquire competitors and build 4G networks to better compete with AT & T and Verizon Wireless.
Heather said: "Since joining Sprint in 2007, Softbank's investment is the biggest opportunity for Sprint. This is a transaction that is conducive to competition and consumers, because it will create a stronger first The three major mobile operators are better competing with AT & T and Verizon Wireless. SoftBank has developed into the third largest mobile operator in Japan, and some of their experience is worth learning. "
For a long time, American analysts have been saying that the mobile market needs to reorganize, but they did not expect that its catalyst came from Japan. The 55-year-old Sun Zhengyi is famous for taking risks, he believes that the growth of the US market will make up for the stagnation of the Japanese market. After the merger, Softbank and Sprint will have 96 million users.
Softbank shares plunge
SoftBank said that as part of the transaction, it will acquire a convertible bond of US $ 3.1 billion at a price of US $ 5.25 per share, and it will acquire approximately 55% of Sprint's shares for US $ 7.30 per share. The transaction is expected to be completed in mid-2013. Last Friday, Sprint shares closed at $ 5.73.
On Monday, Softbank's stock price once fell by more than 8%, and the closing price reached its lowest in five months. Since the news that Softbank intends to acquire Sprint last week, Softbank's market value has lost more than 1/5.
Fumiyuki Nakanishi, general manager of investment and R & D at SMBC Friend Securities Co., Ltd. in Tokyo, said: "As with the market response when Softbank prepared to acquire Vodafone's subsidiary a few years ago, everyone said the transaction was too expensive.
SoftBank acquired Vodafone ’s Japanese subsidiary in 2006 for $ 15.5 billion to enter the mobile business market. Nakanishi said: "Softbank used to have a market value of about 3 trillion yen, but now it will reach 6 trillion yen. This is absolutely impressive, and I think investors will believe him to be the right decision."
Great risk
Sun Zhengyi admits that this is a risky transaction, but he also pointed out that there is a lot of risk in doing nothing.
Sun Zhengyi said at a press conference: "If you do nothing, it may be safe, because we will face challenges in the US market. But we must enter a new market, a market with different cultures, we must start from scratch . "
Sun Zhengyi also said: "Therefore, not accepting this challenge will be a greater risk, and SoftBank must step out of the rapidly aging Japanese market."
According to people familiar with the matter, four banks have agreed to borrow 1.65 trillion yen (approximately US $ 21.1 billion) from Softbank, namely Japan ’s Mizuho Financial Group, Sumitomo Mitsui Financial Group, and Mitsubishi. UFJ Financial Group (Mitsubishi UFJ Financial Group) and Deutsche Bank.
Sprint has $ 15 billion in debt and has suffered losses in the past 19 quarters. Therefore, Standard & Poor's has issued a warning that the transaction may undermine SoftBank's financial risks and put pressure on operating cash flow in the next few years.
Does not involve Clearwire
The two companies said that after the transaction, Heather will continue to serve as Sprint CEO.
Industry analysts said that Softbank's acquisition of Sprint for $ 20.1 billion means that Sprint is worth $ 28.6 billion, about 2/3 higher than the market value at the close of last Friday.
Some analysts said that after the transaction is completed, Sprint may use part of the proceeds to acquire the remaining shares of Clearwire. Sprint currently owns 48% of Clearwire. With the popularity of smart phones, the increasing pressure of data traffic facing mobile operators is also increasing. Therefore, Clearwire's high-speed network is a huge attraction.
But SoftBank said that the transaction does not require Softbank to take any action against Clearwire.
Industry insiders also said that the transaction will give Softbank the bargaining chips with Apple to better compete with domestic competitor KDDI. Currently, both Softbank and KDDI operate iPhones in the Japanese market.
According to Japanese media reports, after acquiring Sprint, Softbank may also acquire MetroPCS CommunicaTIons, another small US operator. Sprint has long been interested in MetroPCS CommunicaTIons, but the latter announced its merger with T-Mobile USA earlier this month.
According to Thomson Reuters data, the Sprint transaction brought Japanese companies overseas mergers and acquisitions worth US $ 75 billion this year. The transaction is not the first time Japanese companies have entered the overseas telecommunications market. Previously, NTT Docomo had invested in AT & T Wireless and KG Telecom.
Charcoal BBQ Grill,Charcoal Smoker BBQ Grills,Charcoal Barbecue Grill,Charcoal Grill
Shaoxing Haoda Electrical Appliance Co.,Ltd , https://www.zjhaoda.com