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Japan's Softbank to buy 70% of US telco Sprint

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Softbank to buy 70% of Sprint
Softbank to buy 70% of Sprint

Japanese telecoms operator Softbank is set to buy a 70percent stake in US telco Sprint, at a cost of $20.1billion.

At a joint press conference in Tokyo by Softbank's founder and chief, Masayoshi Son, and the Sprint chief executive, Dan Hesse, the two companies confirmed the deal would see Softbank buying £12.1billion of existing shares along with a further £8billion for new shares that the network will issue.

The deal would net Sprint around $3billion in cash, which the company is said to be in need of to bolster existing business and fund growth, including the potential buyout of fellow US mobile operator Clearwire. Meanwhile Softbank gains entry into the US market and, with the Japanese market somewhat stagnated, has an opportunity for growth. The combined group will have 96 million users.

"There is always a risk when you face a big challenge," Son said at the briefing. "It could be safe if you do nothing and our challenge in the US is not going to be easy at all. We must enter a new market, one with a different culture, and we must start again from zero after all we have built. But not taking this challenge will be a bigger risk."

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