SoftBank CEO gives up control to make Sprint's merger with T-Mobile happen

A massive bet on Sprint has cost Japanese billionaire Masayoshi Son a lot.His company, SoftBank, spent tens of...

Posted: Apr 30, 2018 1:53 PM
Updated: Apr 30, 2018 1:53 PM

A massive bet on Sprint has cost Japanese billionaire Masayoshi Son a lot.

His company, SoftBank, spent tens of billions of dollars on the US wireless carrier. And now Son is set to do something he had previously signaled was unthinkable: give up control.

Under the deal announced Sunday to merge Sprint with T-Mobile in the United States, SoftBank will end up with a minority stake of about 27% in the combined company. T-Mobile's owner, Deutsche Telekom, will hold around 42% and also have control of the board and voting rights.

The merger, if it gets past regulators, will fulfill Son's long-standing goal of creating a heavyweight challenger to AT&T and Verizon. But he won't be in the driver's seat.

Son, an ambitious dealmaker, has seen his vision fall apart before. He masterminded SoftBank's 2013 takeover of Sprint with the aim of quickly merging it with T-Mobile. But concerns about regulatory challenges from the Obama administration effectively killed that plan, and talks with T-Mobile ended in 2014.

"I lost my confidence that moment," Son said at an earnings presentation early last year. "I really didn't like the world anymore, I did a lot of thinking, and I lost my hair," he joked, gesturing to his bald pate.

Related: T-Mobile and Sprint agree to merge, finally

During the 2014 talks, Son was negotiating for a majority stake in the combined company, which made sense because Sprint was larger than T-Mobile at the time.

When the two companies again came close to a deal late last year, negotiations collapsed because Son and Deutsche Telekom CEO Tim Hoettges reportedly couldn't agree on who would have control.

In a presentation shortly after the talks ended, SoftBank said that "maintaining control" was a key part of its strategy for Sprint.

Nearly six months later, Son has changed his stance. That partly reflects financial reality: T-Mobile's market value is now more than twice the size of Sprint's. And the deal would also remove what analysts have described as a major headache for SoftBank.

Sprint is facing fierce competition in the US wireless industry and will need billions of investment as carriers prepare to shift to 5G technology in the coming years. Being part of a much bigger player, even as a minority shareholder, could help Son pursue some of his broader ambitions while sharing the financial burden.

Related: What is 5G

Son set up a tech fund worth close to $100 billion with Saudi Arabia last year. It has pumped money into companies working on computer chips, artificial intelligence, autonomous cars and other technologies.

The introduction of 5G networks will help advance many of those industries and Sprint and T-Mobile are emphasizing how eager they are to build one: the 25-page presentation explaining their planned merger mentions 5G nearly three dozen times.

"This is what's going to enable, finally, autonomous cars, drones, AR, VR," Sprint CEO and SoftBank board member Marcelo Claure told analysts and investors on a conference call on Sunday, referring to augmented reality and virtual reality. "And if you look at SoftBank, that's where we're making investments."

By playing up their plans to build a 5G network, the companies involved in the proposed merger are appealing to the Trump administration's desire for the United States to take the lead in building the next generation of wireless technology.

But that may not be enough to convince regulators to green light the deal. Columbia University law professor Tim Wu tweeted Sunday that the merger "has decent odds of being nixed."

Huntsville
Clear
65° wxIcon
Hi: 81° Lo: 54°
Feels Like: 65°
Florence
Clear
67° wxIcon
Hi: 79° Lo: 57°
Feels Like: 67°
Fayetteville
Clear
59° wxIcon
Hi: 79° Lo: 52°
Feels Like: 59°
Decatur
Clear
62° wxIcon
Hi: 82° Lo: 54°
Feels Like: 62°
Scottsboro
Clear
57° wxIcon
Hi: 83° Lo: 57°
Feels Like: 57°
WAAY Radar
WAAY WAAY-TV Cam
WAAY Temperatures

Alabama Coronavirus Cases

Confirmed Cases: 17952

Reported Deaths: 630
CountyConfirmedDeaths
Mobile2239116
Jefferson1837102
Montgomery171040
Tuscaloosa78315
Marshall6939
Franklin5567
Lee54833
Shelby51720
Tallapoosa42765
Butler41118
Chambers35525
Walker3542
Elmore3548
Madison3394
Baldwin2909
Morgan2801
Dallas2723
Etowah25711
DeKalb2483
Lowndes24612
Coffee2361
Sumter2247
Autauga2214
Houston2204
Bullock2095
Pike2030
Colbert1842
Hale1739
Russell1710
Marengo1706
Barbour1671
Lauderdale1642
Calhoun1603
Choctaw1538
Wilcox1487
Clarke1442
Cullman1430
Randolph1277
St. Clair1231
Marion12211
Pickens1164
Dale1150
Talladega1135
Limestone1060
Chilton1011
Greene944
Winston900
Macon824
Henry802
Covington801
Jackson782
Crenshaw753
Bibb751
Washington706
Escambia633
Blount621
Lawrence500
Geneva430
Conecuh411
Coosa401
Monroe402
Perry390
Cherokee373
Clay272
Lamar260
Fayette160
Cleburne151
Unassigned00

Tennessee Coronavirus Cases

Confirmed Cases: 22566

Reported Deaths: 364
CountyConfirmedDeaths
Davidson504062
Shelby4943111
Trousdale13924
Rutherford119623
Sumner88145
Hamilton79415
Bledsoe6071
Williamson55210
Putnam4795
Robertson4653
Tipton4423
Out of TN4184
Lake4140
Wilson4078
Knox3755
Bedford2834
Montgomery2693
Rhea2100
Hardeman1960
Madison1752
Loudon1430
McMinn14114
Macon1363
Cheatham1230
Bradley1221
Fayette1152
Cumberland1121
Dickson1090
Unassigned920
Blount913
Maury890
Sevier812
Washington750
Coffee730
Wayne640
Gibson631
Monroe622
Sullivan602
Hickman580
Lauderdale561
Franklin531
Greene502
Dyer500
Marion401
Anderson401
DeKalb370
Hamblen362
Smith341
White330
Hawkins332
Lawrence310
Grundy311
Haywood312
Marshall311
Obion301
Henry300
Jefferson280
Carroll271
Overton260
Meigs260
Weakley260
Lincoln250
Warren230
Cannon210
Perry210
Cocke200
Carter191
Campbell181
Morgan170
Jackson170
Crockett162
Roane160
Polk160
Johnson160
Henderson150
Hardin152
Sequatchie150
Humphreys131
Fentress120
McNairy120
Chester120
Giles120
Scott120
Stewart110
Claiborne90
Houston80
Grainger80
Clay70
Benton71
Decatur50
Unicoi40
Union40
Van Buren40
Lewis30
Pickett30
Moore30
Hancock10

 

 

Community Events