Sprint and Softbank

The main purposes of acquisition of Sprint by Softbank

Yoichi Horibe

M&A in Tele-communication market is rapidly growing in this global era. Computer and information system market is also growing by M&A. However they don’t implement big deals. For example, Apple and Samsung only want to buy some parts of devise and they don’t need to buy whole company. This small deal makes them save money.

However one Japanese company came out. Japanese mobile phone market is behind the others who are such as American mobile phone companies and Samsung. It was supposed to be difficult to beat these companies because Softbank even couldn’t beat Japanese main competitors such as NTT DoCoMo and KDDI. However, the acquisition of 70% Sprint Nextel stocks makes them corporate with Softbank and breaks a barrier of Japanese oligopoly and American oligopoly which is occupied by Verizon and AT&T. Softbank expects further growing of Sprint Nextel.

The reason is that American wireless network speed is slow. Softbank is going to use the Japanese technology in US. Appreciated Japanese Yen makes them enable to deal this biggest M&A in Japan.

 

Photo1: Softbank couldn’t beat NTT DoCoMo and KDDI which I used to contract.

Photo 2: After M&A, their consolidated net sales automatically went up.

 

              We can say the same thing in American oligopoly. Sprint Nextel should be up soon. Before this M&A, Softbank used to restrict some Japanese companies such as Vodafone Japan, Willcom, and Telecom Japan.

 

Conclusion

              We could say two main purposes they conducted this M&A.

l  Each company was struggling in each oligopoly.

l  Each company had merit. Softbank’s merit is appreciated currency. Sprint Nextel’s merit is possibility to improve their slow wireless network.

 

These rational benefits drive them to conduct this M&A.