Japan’s Softbank to acquire smaller rival eAccess for $2.3 billion

Softbank Corp, Japan's third-largest mobile phone company, yesterday said that it would acquire its smaller rival, eAccess, for about ¥180 billion ($2.3 billion) in stock.

Softbank will pay 16.74 of its shares for each share of eAccess, valuing the Tokyo-based company's at ¥52,000 ($659), more than three times eAccess closing price of ¥15,070 ($191) on 28 September.

Justifying the huge premium, Softbank's president Masayoshi Son told reporters in Tokyo that the company is not overpaying for eAccess looking at its network infrastructure assets, number of subscribers and synergies.

With EAccess's bandwith and its network for Long-Term Evolution (LTE) data transmission, Softbank will be able to give its smartphones subscriber's higher speed to stream video and surf the Internet.

Softbank, which introduced Apple in Japan, will use eAccess's spectrum for its high-speed network for the new iPhone 5, which supports the LTE technology.

The deal will give increase Softbank's LTE base stations by 50 per cent, to an estimated 30,000 by March.