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Softbank likely to sell on two-thirds of eAccess

Japanese cellco needs to offload most of its new unit to satisfy spectrum ownership rules, Samsung and Ericsson among buyers


Published: 15 January, 2013

READ MORE: M&A | Japan | Softbank | Regulator | LTE

Japan's Softbank is embroiled in complex M&A deals, including its bid to take 70% of Sprint, a deal which is also likely to include the US carrier's full takeover of Clearwire, and possibly an alliance with Dish Network. At home, Softbank completed the $2.3bn acquisition of eAccess, owner of Japan's fourth cellco, eMobile, on January 1. However, it may now have to sell on two-thirds of that business to satisfy regulators.

The reported deal would see Softbank selling 67% of the unit to a group of 11 companies including Samsung and Ericsson, splitting the shares equally between each of them. According to reports in the Nikkei and Associated Press news agencies, the planned transaction has been sparked by Japanese laws limiting spectrum ownership. Keeping more than one-third of eAccess could prevent Softbank from gaining additional new frequencies in future.

The deal would see two major foreign telco infrastructure suppliers, Samsung and Ericsson, and three other external firms, gaining a stake, along with six domestic companies including Orix. Softbank will remain the largest shareholder but will lose veto rights, and its control could be diluted further, according to some analysts, as many of the shares it will keep do not come with voting rights.

The purchase of eAccess enabled Softbank to leapfrog KDDI to become Japan's second operator by subscriber numbers as well as gaining new spectrum for its rapidly growing LTE networks.

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