Yahoo Japan abandons plan to buy eAccess from SoftBank for $3.17 bn

Yahoo Japan Corp yesterday abandoned plans to buy mobile and broadband services provider eAccess Ltd from its parent SoftBank Corp for $3.17 billion.

Yahoo Japan, 42.5 per cent owned by SoftBank, will proceed with a planned low-cost mobile Internet service using the eAccess mobile network, both companies said in a statement.

Softbank, run by Masayoshi Son, had acquired Tokyo-based eAccess in 2012 in a $2.6 billion share-swap deal.

It also said that eAccess and wireless provider Willcom Inc, a subsidiary of SoftBank, will go ahead with their scheduled 1 June merger, and the new company will be called Ymobile Corporation.

In March, Yahoo Japan said that it would pay ¥324 billion ($3.17 billion) to buy mobile and broadband provider eAccess Ltd from its parent SoftBank in order to further stimulate rapid growth in Internet services for smartphones and tablets. (See: Yahoo Japan to buy mobile and broadband provider eAccess from SoftBank for $3.17 bn)

But the sale was also designed to give SoftBank access to cash in order to fund its aggressive overseas acquisition plans, especially a bid for US wireless carrier T-Mobile.

SoftBank, Japan's third-largest mobile phone company, last year acquired a controlling 70-per cent stake in Sprint Corp for $20.1 billion.

Justifying the cancellation of the proposed sale, SoftBank said after holding further in-depth discussions with Yahoo Japan, it came to the conclusion that rather than Yahoo Japan converting eAccess to a subsidiary and building infrastructure on its own, it would be better to develop the business by employing the strengths of each company, with Yahoo Japan responsible for services and the eAccess for infrastructure.