(Bloomberg) — Nippon Telegraph & Telephone Corp. plans to turn its wireless carrier unit NTT Docomo Inc. into a wholly owned subsidiary, a move that may help Prime Minister Yoshihide Suga’s policy push to lower phone tariffs.
Pedestrians cross a road in front of an NTT Docomo Inc. store in Tokyo, Japan, on Wednesday, April 24, 2019. Docomo this month cut prices on its mobile phone data plans, some by as much as 40 percent, responding to government pressure to reduce prices that it says are among the world’s highest.
NTT will pay 3,900 yen a share to acquire the shares it doesn’t already hold, the companies said in a statement. The buyout is worth around 4.25 trillion yen ($40 billion), a more than 40% premium to Monday’s closing price in Tokyo. Given that parent NTT already controls 66% of the wireless carrier, any proposal is all but guaranteed to pass.
Docomo’s board said it’s in favor of the takeover by its parent, which will fund the purchase through borrowings. The tender offer, the largest for a Japanese company in history, is scheduled to start Sept. 30 and will be completed in the fiscal year ending March 31. When NTT spun out Docomo in 1998, it was also the biggest-ever initial public offering at the time.
The proposal to combine the former national companies comes just 15 days after Suga succeeded Shinzo Abe as the nation’s prime minister. With government documents showing data-heavy users in Tokyo pay more than three times for a monthly contract than users in Paris, Suga has made reducing phone bills charged by Docomo and Japan’s other major carriers a priority to score a quick policy win and avoid being seen as a caretaker leader, market watchers have said.
“In order to