Sprint confirms Softbank negotiations
The US carrier said that the talks involve 'a potential substantial investment'
Sprint Nextel confirmed Thursday that it is in discussions with Softbank "regarding a potential substantial investment" in Sprint by the Japanese carrier.
The confirmation, issued in a one-paragraph statement, follows a report in the Japanese business newspaper Nikkei that Softbank is in negotiations to acquire Sprint in a deal reportedly worth more than US$30 billion. Interestingly, Softbank on Thursday evening Japan time had issued its own statement, saying that the Nikkei report was "based on speculation," that the company had not announced anything and does not comment on speculation.
Sprint's statement contained no specifics regarding the negotiations, but Nikkei reported that the aim is for Softbank to acquire all of the outstanding shares of Sprint. Both companies are the third-largest carriers in their respective nations. The deal, if it does go through, would be the largest acquisition of a foreign company by a Japanese firm, Nikkei reported.
Softbank is known to aggressively expand into new markets and has large investments in Japan and Asia. The company said earlier this month it will purchase domestic rival eAccess in a $2 billion deal to help expand its mobile network.
The U.S. mobile industry is undergoing a wave of consolidation. Earlier this month, Deutsche Telekom's T-Mobile USA and MetroPCS Communications said they signed an agreement to merge in a deal that will see MetroPCS shareholders receive $1.5 billion in cash and 26 percent of the new company. T-Mobile is the fourth-largest U.S. mobile operator.
Sprint's chief financial officer said the company supports tie-ups in the mobile industry when asked about the MetroPCS deal Wednesday morning at a conference in Arizona.
"We aren't going to comment on the whole M&A thing," said Sprint CFO Joe Euteneuer. "We believe in consolidation in the industry, I don't think that has changed."