[TOKYO] NTT Docomo is buying SBI Holdings’ online bank in a 420 billion yen (S$3.7 billion) deal to shore up the Japanese mobile carrier’s financial offerings in a hyper-competitive market.
Nippon Telegraph and Telephone’s mobile unit will launch a tender offer for SBI Sumishin Net Bank, offering 4,900 yen a share – a 49 per cent premium to the online bank’s closing price on May 28.
At the conclusion of the deal, NTT Docomo aims to own 65.81 per cent of the online bank, which will delist. Sumitomo Mitsui Banking Corp will continue to hold 34.19 per cent of SBI Sumishin, the companies said in a statement on Thursday (May 29).
Shares of SBI Sumishin surged by a record 21.3 per cent after local outlets including the Nikkei reported the news earlier. NTT Docomo’s stock price rose 0.6 per cent, while SBI Holdings gained 7.8 per cent.
The move is part of a capital alliance between the state-backed telecom group and SBI Holdings, where NTT Docomo will invest 110 billion yen in the venture capital fund operator for a 8.25 per cent stake.
NTT Docomo and SBI Holdings will co-develop new services from asset management to insurance, while NTT Data Group will provide support for SBI Holdings’ financial services, executives said.
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NTT Docomo, which has close to half of Japan’s mobile phone market, has been slow to bolster its financial asset offerings and services compared with its rivals. That is as nimbler competitors have gradually eaten into its dominant share.
Japan’s third-largest carrier SoftBank made the country’s biggest payments app PayPay a subsidiary in 2022, and recently announced a three-way partnership with Sumitomo Mitsui Banking’s credit card operations.
No 2 mobile provider KDDI has its own financial unit. Online shopping mall operator Rakuten Group has started a mobile unit, seeking to expand the reach of its lucrative financial arms via the telecom business.
The acquisition targets existing NTT Docomo customers rather than attract new ones, and is a defensive move to prevent cancellations, said Naoki Fujiwara, senior fund manager at Shinkin Asset Management. If the carrier can expand into areas like investment trusts, it may create additional revenue, he added. BLOOMBERG
