(Bloomberg) — Nippon Telegraph & Telephone Corp.’s 4.25 trillion yen ($40 billion) buyout of wireless unit NTT Docomo Inc. will make it easier for the recombined company to sell assets, generate enough cash to deliver dividends and repay debt incurred from financing the deal, Chief Executive Officer Jun Sawada said.



a man wearing a suit and tie: NTT CEO Jun Sawada Interview


© Bloomberg
NTT CEO Jun Sawada Interview

The merger will also help the Tokyo-based telecommunications giant keep up share buybacks and invest aggressively overseas, Sawada said in an interview. Greater cost savings as well as sales and securitization of real estate, data centers and other assets will deliver enough cash to revamp the business while rewarding shareholders and boosting its overseas portfolio, according to him.

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“We want to make our existing assets more liquid and use that to invest in new businesses,” he said Tuesday.

The merger between the telecommunications behemoths effectively ends an experiment that started in 1998 when NTT sold Docomo shares in the biggest-ever initial public offering at the time. It gave investors a chance to bet on the fast-growing sector, while Docomo executives went on a buying spree overseas, using the influx of cash to extend Japan’s then-lead in mobile services to the rest of the world. Even though they blew billions of dollars on minority stakes in carriers that eventually failed to deliver on their promise, NTT will keep pushing to expand overseas, Sawada said.

“We want Docomo to invest abroad again,” Sawada said, adding that he wants Docomo to work closely with NTT Communications, the network and cloud division of NTT, on an overseas strategy. “But it depends on how it’s done,” he said.

NTT shares rose 3.3% on Wednesday, the most in almost two months and outpacing other telecommunications stocks in Tokyo.

Sawada has already made clear that he wants to

(Bloomberg) — The board of NTT Docomo Inc. is holding a meeting Tuesday to discuss Nippon Telegraph & Telephone Corp.’s plans to turn its wireless carrier unit into a wholly owned subsidiary, a move that may help Prime Minister Yoshihide Suga’s push to lower phone tariffs.



a group of people standing next to a sign: Pedestrians cross a road in front of an NTT Docomo Inc. store in Tokyo, Japan, on Wednesday, April 24, 2019. Docomo this month cut prices on its mobile phone data plans, some by as much as 40 percent, responding to government pressure to reduce prices that it says are among the world's highest.


© Bloomberg
Pedestrians cross a road in front of an NTT Docomo Inc. store in Tokyo, Japan, on Wednesday, April 24, 2019. Docomo this month cut prices on its mobile phone data plans, some by as much as 40 percent, responding to government pressure to reduce prices that it says are among the world’s highest.

The buyout could be worth as much as 4 trillion yen ($38 billion), based on a 30% premium to Monday’s closing price in Tokyo, the Nikkei newspaper reported earlier. Given that parent NTT already controls 66% of the wireless carrier, any proposal is all but guaranteed to pass. The transaction may be announced as soon as today.

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The proposal to combine the former national companies comes just 15 days after Suga succeeded Shinzo Abe as the nation’s prime minister. With government documents showing data-heavy users in Tokyo pay more than three times for a monthly contract than users in Paris, Suga has made reducing phone bills charged by Docomo and Japan’s other major carriers a priority to score a quick policy win and avoid being seen as a caretaker leader, market watchers have said.

The deal to buy Docomo would be the largest tender offer for a Japanese company in history. When NTT spun out Docomo in 1998, it was also the biggest-ever initial public offering at the time.

“It’s likely that one of the goals here is for NTT to push for lower rates,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “It’s



a sign on a pole: The logo of NTT is didplayed at a building in Tokyo


© Reuters/ISSEI KATO
The logo of NTT is didplayed at a building in Tokyo

By Sam Nussey and Makiko Yamazaki

TOKYO (Reuters) – Japan’s Nippon Telegraph and Telephone Corp (NTT) said it is looking at taking full control of its wireless carrier business in a deal that could be worth around 4 trillion yen ($38 billion) and pave the way for price cuts in the sector.

The buyout will be discussed at a board meeting on Tuesday, NTT said in a statement following a Nikkei newspaper report on the matter. The value of the 34% of NTT Docomo Inc’s shares not owned by NTT is based on a 30% premium to Monday’s closing price, Reuters calculations showed.



FILE PHOTO: The logo of NTT Docomo is seen during its flagship shop's reopening event in Tokyo


© Reuters/TORU HANAI
FILE PHOTO: The logo of NTT Docomo is seen during its flagship shop’s reopening event in Tokyo

The move comes as Japan’s new prime minister Yoshihide Suga launches a fresh attempt to push the country’s three biggest mobile network providers into cutting fees. The government is NTT’s biggest shareholder, with a 34% stake.

A buyout will have broad implications for the sector, with any fee cuts likely to be followed by NTT Docomo peers KDDI Corp and SoftBank Corp , hitting profit margins.

NTT shares fell 4% in early trading, while NTT Docomo shares were untraded with a glut of buy orders.

KDDI and SoftBank shares also fell around 4%, extending the slide since the previous prime minister, Shinzo Abe, announced plans to resign on Aug. 28.

NTT Docomo was spun off from Japan’s former state monopoly in 1992 as part of government efforts to drive competition in the sector. It listed in 1998.

A buyout would mark the end of a prominent “parent-child” listing that are frowned on in other economies but remain common in Japan.

“Post acquisition, Docomo