Vodafone Japan? Why did it fail? Because of low investment, HR issues, disconnect between London-HQ and Japan operations. Learn from Vodafone's failure.

SoftBank & YAHOO acquire Vodafone KK

The Deal

SoftBank and Yahoo-Japan acquired 97.7% of outstanding shares of Vodafone Japan (Vodafone KK) in Japan’s largest M&A transaction (the remaining 2.3% are owned by other investors). In a Leveraged Buy-Out (LBO) a consortium of banks extended US$ 9.5 to 10.4 Billion in loans.

Citibank was the lead in this transaction on SoftBank side, but because of the size of this transaction, essentially all major players in Japan’s financial industry were involved – including our company, which advised one of the loan risk assurance companies on aspects of the risks of this transaction.

SoftBank acquires Vodafone KK (= Vodafone Japan) - outline of the transaction
SoftBank acquires Vodafone KK (= Vodafone Japan) – outline of the transaction

SoftBank’s aim: grow to 26 million mobile subscribers and become No. 2 in Japan

SoftBank announced the plan to return to J-Phone’s growth curve and to aim for 26 million subscribers, which would place the resulting mobile operator on place 2 in Japan.

 After acquisition of J-Phone by Vodafone, growth stopped.
After acquisition of J-Phone by Vodafone, growth stopped.

Japan’s new telecom landscape

Three major players emerge after a sequence of consolidation and restructuring: NTT, KDDI and Softbank/YAHOO. The following figure outlines Japan’s telecom sector in 2006:

Outline of Japan's telecom sector in 2006 and M&A transactions
Outline of Japan’s telecom sector in 2006 and M&A transactions

For more information:
download our JCOMM-Report on Japan’s telecom’s industry

You can find a sequence of similar diagrams explaining the evolution of Japan’s telecom sector in our report on Japan’s telecom sector.

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