Japanese mobile carrier Softbank Corp’s failed bid for T-Mobile US Inc marked a rare defeat for its brash billionaire founder, but few expect it to sideline a man intent on building “the world’s No. 1 company.”
After years of scooping up companies big and small, Softbank president Masayoshi Son’s voracious appetite for acquisitions hit a snag amid reports earlier this month that the firm’s US unit had abandoned a US$32 billion offer for T-Mobile in the face of regulatory opposition.
Son never confirmed his plan to buy T-Mobile. However, he repeatedly said that he wanted a stronger No. 3 carrier to take on US market leaders Verizon Wireless Inc and AT&T Inc, after last year’s monster US$21.6 billion acquisition of Sprint Nextel Corp.
The T-Mobile acquisition was seen as key to that strategy.
“Softbank does not discuss whether or not we intend to purchase particular firms,” Son told reporters in Tokyo.”I have never made an official comment on this, and I will not have an official comment today.”
However, he added: “I am always exploring various options.”
Son may have pulled back because he has his eye on another company and needed to free-up cash, analysts said.
“My guess is that he needed to cancel it because he cannot let two major deals run at the same time... I see this as a good thing,” SMBC Nikko Securities analyst Satoru Kikuchi said.
In the wake of the deal’s collapse, Sprint replaced its chief executive Dan Hesse with Marcelo Claure, the head of Softbank mobile service subsidiary Brightstar.
Money-losing Sprint had been dogged by criticism over poor network quality and spotty coverage, but Son insisted that those problems are gone and the firm under a new boss is going to offer big discounts to win back customers.
He also hired former Google Inc executive Nikesh Arora, who might have persuaded his new boss to drop the T-Mobile deal to pursue grander ambitions.
The new hires “can be seen as a sign that Softbank is taking a more proactive global strategy that isn’t limited to international telecom operations, but also involves the Internet and the media,” Barclays analyst Keiichi Yoneshima said in a client note.
Son is one to think big. Last year, he told shareholders that he was aiming to turn Japan’s third-largest telecom firm into a global behemoth that outpaces the likes of ExxonMobil Corp, JPMorgan Chase & Co and Apple Inc.
“I used to discreetly say we would be among the world’s top 10 firms, but that doesn’t fit my goals anymore,” he said.
The firm is nowhere near that level right now and was largely unknown outside Japan before the Sprint deal was announced.
At home, Softbank was the first Japanese carrier to offer Apple’s iPhone and is known for commercials featuring a talking snow-white dog that have also starred US actor Tommy Lee Jones.
Since the Sprint deal, Softbank has snapped up Finnish game developer Supercell Oy, creator of the hugely popular Clash of Clans, and a host of smaller firms.
Some have raised red flags over the amount of debt Softbank was taking on to finance the deals.
However, the firm owns a big stake in Chinese e-commerce giant Alibaba which is soon expected to list its shares in a multibillion-dollar offering that could be a huge cash windfall for Softbank.
With so much already invested in the US market, Son could still take another run at T-Mobile, said a Tokyo-based analyst, who asked not to be named.
“To boost revenue and customers, the T-Mobile deal would have been a great plan,” he said. “But they must have expected that it could fail this time. I can still see them continuing to pursue the deal in the longer term.”
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS