The buyout will see NTT pay US$38 billion for the shares it does not already hold in Docomo, equating to about 40% of the company. The value gave shareholders a 40% premium on Monday’s trading price.
Docomo went public in 1998, in what was the biggest IPO at the time. This latest change to its ownership is the largest tender ever recorded for a Japanese company. The transaction is scheduled to complete at the end of March.
The news follows the appointment of Japan’s new Prime Minister, Yoshihide Suga, who has long criticised the profit margins of Japan’s telcos and called for lower mobile service rates.
In a speech last month he said: “I want to create a framework that allows for greater competition in the field.”
Since then Suga has announced that tariff reductions remain a priority for him – reportedly, data contracts in Tokyo are more than three times the cost of those in Paris.
In 2018 Suga suggested that mobile rates could be 40% lower than they were at the time.
Feeling the pressure, NTT’s CEO Jun Sawada confirmed the possibility of a tariff cut on Tuesday, but denied it was due to government pressure.
Despite this political backdrop, it is largely expected the NTT board will approve the takeover of Docomo.
