In a move applauded by the company’s investors, Softbank of Japan confirmed Monday that it will separate its stable, but slow growing domestic mobile and telecommunications business from fast growing, but riskier overseas operations that include the company’s majority stake in U.S. wireless carrier Sprint.
Softbank explained in a press statement that the plan is intended “to materialize its previously announced strategic direction, which is to position its two core businesses (domestic operations and global operations) as future growth drivers.” Valued at ¥1.3 trillion (US$11.3 billion) as of March 7, Softbank’s domestic Japanese holdings include Softbank Mobile (which ranks among Japan’s top three wireless carriers) and stakes in Gungho Online Entertainment and Yahoo Japan. The company’s foreign holdings, which are valued collectively at ¥8 trillion (US$69.9 billion), include a 32% stake in Chinese e-commerce giant Alibaba and investments in a wide range of international technology and Internet firms in addition to Sprint.
Under the plan, Softbank will spin-off these operations into two separate, but wholly-owned subsidiaries. Ken Miyauchi, the chief of Softbank’s mobile operations in Japan, will oversee the domestic subsidiary, while Softbank President and Chief Operating Officer Nikesh Arora will assume leadership of the overseas subsidiary. Contingent upon receipt of shareholder approvals, Softbank expects to complete the split by year’s end.