Japanese operator Nippon Telegraph and Telephone (NTT) plans to take its mobile business NTT Docomo private. Docomo confirmed it supports the offer of JPY 3,900 per share for the 34 percent of the company NTT does not already own, after receiving an independent fairness opinion. The offer is a significant premium on Docomo's last closing share price, of JPY 2,775, and represents a total value of JPY 4.25 trillion.
The takeover follows a successful strategy by NTT to sell its fixed services, such as the Hikari fibre plans, also under the Docomo brand in recent years. It also fits with the company's 'One NTT' strategy, which has seen its other ICT activities consolidated under a single brand. NTT said it plans further integration of the subsidiaries following the acquisition and de-listing of Docomo.
Absorbing Docomo will help build on the strategy to offer integrated 5G and ICT services to business customers and NTT's efforts to expand into more personalised consumer services such as payments and loyalty offers to offset the pressure on prices. The competitive pressure is expected to increase in the Japanese market with the entry of the new mobile operator Rakuten, as well as government efforts to control prices and increase market transparency, driving the need for cost savings at the operators.
Along with news of the takeover, Docomo announced the appointment of long-time NTT executive Motoyuki Ii as its new CEO from 01 December. Kazuhiro Yoshizawa will remain a member of the board of directors, responsible for special missions.
NTT will fund the acquisition through short-term loans from Japan's largest banks, led by Mitsubishi UFJ Financial Group. The total loan package will reach JPY 4.3 trillion, which will be refinanced by November 2021. The tender offer opens 30 September and will run until 16 November.
