Press Releases 2004

SOFTBANK to Acquire JAPAN TELECOM

May 27, 2004

SOFTBANK CORP. (Head office: Chuo-ku, Tokyo; President and CEO: Masayoshi Son; “SOFTBANK”) announced that it has agreed at a board meeting held today to acquire JAPAN TELECOM CO., LTD. (Head office: Chuo-ku, Tokyo; Director,President & CEO: Hideki Kurashige; “JAPAN TELECOM”). JAPAN TELECOM is a fixed-line operator and an affiliate of Ripplewood Holdings L.L.C. (Head office: New York City, U.S; CEO: Timothy C. Collins).

As a result of the acquisition, the SOFTBANK Group will have consolidated sales of around 1 trillion yen and control approximately 10 million access lines, thus becoming a leading global telecommunication operator.

1. Purpose of the acquisition

The SOFTBANK Group will substantially expand the scale of its business through the acquisition of JAPAN TELECOM and will seek to become “the No.1 broadband company”, offering a comprehensive range of communication services including voice, data transmission and internet connectivity to consumer and enterprise customers.

2. Synergies

  • (1) JAPAN TELECOM is a pioneer of IP-VPN leased line networks and wide-area Ethernet services to the enterprise sector. It has an established presence in the enterprise data services arena and is expected to contribute towards strengthening SOFTBANK’s enterprise businesses expansion plans.

  • (2) JAPAN TELECOM has approximately 170,000 domestic enterprise customers, primarily large corporations which will support the further expansion of SOFTBANK Group’s customer base. In addition, SOFTBANK’s corporate marketing capabilities and customer acquisition channels will be strengthened and diversified.

  • (3) JAPAN TELECOM owns approximately 12,000 km of fiber-optic network infrastructure. The propriety IP network operated by the SOFTBANK Group will be strengthened and made more efficient by connecting with this fiber-optic network.

  • (4) As a result of the acquisition, the SOFTBANK Group will be able to substantially enhance its human resources for enterprise sales and engineering.

  • (5) The acquisition will also enable the SOFTBANK Group to, on a consolidated basis, improve its EBITDA and strengthen its revenue base.

3. Outline of the transaction

  • Method of acquisition: Approximately 144 million (100%) shares of the issued and outstanding common stock of JAPAN TELECOM

  • Acquisition price: Approximately 340 billion yen

    Common stock purchased by SOFTBANK
    143.3 billion yen
    Net interest-bearing debt (estimate as of June 4)
    164.0 billion yen
    Preferred stock
    32.5 billion yen
  • Sellers: Six companies in total, including Ripplewood.

  • Date of acquisition: Scheduled on November 16, 2004

4. Impact on SOFTBANK’s Financials

Final net income on a consolidated basis for SOFTBANK is yet to be determined. An announcement will be made as soon as the details are finalized.

About SOFTBANK CORP.

Head office location 24-1, Nihonbashi-Hakozakicho, Chuo-ku, Tokyo
Representative Masayoshi Son
Paid-in capital 162.3 billion yen
Principal lines of business
  • Broadband infrastructure
  • e-commerce
  • e-finance
  • media and marketing
  • broadmedia
  • Internet culture
  • and technology services

About JAPAN TELECOM CO., LTD.

Location 7-1 Hatchobori 4 chome, Chuo-ku, Tokyo
Representative Hideki Kurashige
Paid-in capital 66.2 billion yen
Principal line of business Fixed-line telecommunications
Sales
  • 347.1 billion yen (March 2004, unaudited)
  • 222 billion yen (March 2003, consolidated)
Operating profit 18.4 billion yen (March 2003, consolidated)
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