Business & Economy

Japanese giant NTT to present takeover bid for mobile phone subsidiary

Tokyo, Sep 29 (efe-epa).- Japanese telecommunications company NTT announced Tuesday that it would present a public offer to acquire the entirety of its mobile telephony subsidiary NTT Docomo, an operation valued at 4.25 trillion yen ($40,220 million.)

Nippon Telegraph and Telephone Corporation, a former state telecommunications monopoly in Japan, currently owns about 66 percent of the shares in NTT Docomo, and aims to acquire the remaining 34 percent from other shareholders to gain full control of the entity, as reported in a Tuesday statement.

After holding a meeting of its board of directors on Tuesday, the NTT group confirmed the operation Japanese media had reported hours before, and that according to them will become the largest takeover bid carried out to date in the country.

After the acquisition, NTT Docomo will cease to be a listed company on the Tokyo Stock Exchange, where it ended last month as the fourth largest market capitalization company.

After the operation was advanced by local media, the values ??of the former state telecommunications company ended the day with a decrease of 2.85 percent, while its subsidiary advanced 15.7 percent after being temporarily suspended due to excess demand.

The operation is part of the rate reduction process facing the telecommunications sector in Japan, promoted by the country’s new prime minister, Yoshihide Suga.

The new leader of the Japanese Executive, who took office on the 16th after the resignation of Shinzo Abe for health reasons, has said that making mobile phone services cheaper will be one of the priorities of his mandate.

The absorption of its subsidiary will allow the parent company to include in its accounts the turnover of NTT Docomo, which according to government data is the largest mobile phone operator in Japan with some 80 million customers, although it has increasing competition from its rivals KDDI, Softbank and Rakuten, and of new players in the sector.

Conglomerate NTT posted a net profit of 855.3 billion yen last fiscal year, 0.1 percent more year-on-year, while its subsidiary earned 591.5 billion yen, 10.9 percent less.

Nippon Telegraph and Telephone Corporation was privatized in 1985 leading to the opening of the Japanese telecommunications sector, and in 1987 it was the protagonist of one of the largest IPOs to date in Japan.

Its mobile telephony branch was spun off from the parent company in 1992 and became its subsidiary, went public in 1998 and in recent years has tried to expand its operations abroad. EFE -EPA


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