Consolidation in Japan as Softbank moves for eAccess

2 Oct 2012

Japan’s third largest cellular operator by subscribers, Softbank Mobile, has made a move to acquire smaller rival eAccess in an all-stock deal which values eAccess at around JPY180 billion (USD2.3 billion). If it does complete, as expected, in February 2013, the acquisition would enable Softbank to close in on the current second-placed operator, KDDI. The combined Softbank/eAccess claimed around 33.8 million customers at the end of June, while KDDI had 35.7 million, but Softbank has been garnering more net new users than KDDI in recent quarters so the battle for second spot in the market would be very close. Market leader NTT DoCoMo will still be well ahead of its rivals, however, with more than 60 million subscribers by mid-2012.

Softbank president Masayoshi Son has told reporters that his company is not paying over the odds for eAccess, which offers cellular services under the eMobile moniker. Softbank has offered 16.74 of its own shares for each eAccess share, valuing the latter at around JPY53,400 per share. Including eAccess’s JPY223 billion net debt, the deal is valued at JPY408 billion based on yesterday’s share price for Softbank, according to data compiled by Bloomberg.

Both KDDI and Softbank launched Apple’s new iPhone 5 handset earlier this month, and Softbank is thought to be looking to boost its network capacity with the eAccess purchase to help it meet the continuing rise in demand for bandwidth.

Japan, SoftBank Corp, SoftBank Group Corp