Tokyo: Japanese mobile carrier Softbank has agreed to buy a 70 percent stake in US competitor Sprint Nextel for $19 billion in a deal expected to be announced Monday, news reports said.
Softbank and Sprint, the third-biggest carrier in the United States, held a board-level meeting Monday morning and reached a basic accord, the Nikkei business daily said in its online edition.
The deal, announced last week, is expected to top 1.5 trillion yen ($19 billion) with Softbank aiming to complete the purchase by March next year, possibly with the use of loans from Japan’s top three banks and Deutsche Bank, the Nikkei said.
Softbank plans to make an announcement Monday afternoon, the daily said.
A Softbank spokesman said it was in talks to buy a controlling stake in Sprint, but added: “Nothing has been decided.”
The agreement would provide heavily indebted Sprint with liquidity to remain competitive in a US field dominated by AT&T and Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group.
The Wall Street Journal, citing informed sources, said Softbank would buy $8 billion of shares directly from Sprint and another $12 billion of shares in the market.
The move prompted ratings agency Standard & Poor’s to put the Japanese firm’s credit rating on review, saying it would heap pressure on its balance sheet.
Japan’s Nikkei also reported last week that Softbank was separately eyeing fifth-ranked US carrier MetroPCS Communications at just a fraction of the Sprint price tag.
The Sprint acquisition could trigger a clash with Deutsche Telekom, after its US affiliate T-Mobile USA unveiled a plan for a merger with MetroPCS in a deal that would boost the fourth-largest US wireless carrier’s effort to compete in the American market.
Deutsche Telekom would hold a 74 percent stake in the new company.
Some analysts say the Softbank offer for Sprint could be part of a more complex effort to acquire MetroPCS before the T-Mobile deal is consummated.
Softbank shares were down 5.55 percent at 2,262 yen by the break on the Tokyo Stock Exchange Monday.
Softbank, little known outside Japan, is perhaps the country’s most colourful and dynamic among the major mobile carriers, headed by tech entrepreneur Masayoshi Son.
Its outlets across Japan were the first to carry Apple’s iPhone and the company’s well-known television commercials feature a talking snow-white dog and American actor Tommy Lee Jones.