Daily Management Review

Apple may invest $ 1 billion in SoftBank


12/13/2016


Apple is considering a possibility to invest up to $ 1 billion in SoftBank Vision Fund, belongs to Japanese telecommunications company SoftBank, as reported by The Wall Street Journal, citing a source close to the situation.



MIKI Yoshihito
MIKI Yoshihito
Results of the negotiations are not yet known, but such a deal could combine the most expensive company in the world with the largest single investor, the newspaper said. Apple hopes that investment in SoftBank could help gain access to information about new developments in the field of innovative technologies.

It is expected that total volume of technological investment fund SoftBank will soon reach $ 100 billion. The company itself will invest $ 25 billion over five years. In October 2016, SoftBank has also signed a memorandum with the State Investment Fund of Saudi Arabia. Under the agreement, Saudi Arabia will be the lead partner, and invest $ 45 billion in the fund over five years.

Information about the possible investment agreement between the two companies appeared after Head of SoftBank Masayoshi Son met with newly elected US president Donald Trump on 6 December. Mr. Son said SoftBank would invest $ 50 billion in development of business in the United States, and create up to 50 thousand jobs there.

Public Investment Fund of Saudi Arabia may invest $ 45 billion in the initiative over five years. SoftBank itself expects to pour at least $ 25 billion in mutual fund, as follows from the Japanese company’s statement. 

Other major investors are in talks on possible participation, after which overall size of the fund could grow to $ 100 billion. At the same time, investors interested in the deal preferred to remain anonymous.

"In connection with creation of SoftBank Vision Fund, we may increase investment in technology companies throughout the world in the next decade. SoftBank fund can become the largest investor in the technology sector", - said Head of Softbank Masayoshi San. The fund will be managed by subsidiary of SoftBank, located in the UK.

Founded in Tokyo in 1981, SoftBank has accumulated vast experience in investment in information and telecommunication technologies. In particular, it was one of the first investors in Yahoo! This project was very successful and brought SoftBank handsome profit in the early 2000s.

In 2000, SoftBank has invested $ 20 million in business of Jack Ma, Alibaba e-commerce company, becoming the largest shareholder with 32.2% stake. This share is worth about $ 65 billion in current capitalization of the Chinese giant.

In 2006, SoftBank bought mobile operator Vodafone Japan for $ 17 billion. The following year, Steve Jobs introduced iPhone. Later in 2008, SoftBank’s newly acquired asset telecom became exclusive partner of Apple in Japan. The corporation is also a major shareholder in Yahoo! Japan, which is now worth $ 25.22 billion. Share of SoftBank there is about 35%.

In 2012, the corporation acquired a 78% stake in US operator Sprint for $ 21.6 billion, and then brought the share to 80%. In 2013, the Japanese company has made another large purchase. It bought 51% stake in Clash Of Clans game developer, Finnish Supercell, for $ 2.1 billion, and then increased the share to 73.2%. 

source: wsj.com






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