SoftBank has embarked on a plan to spilit its Japanese business from more volatile but potentially faster growth global operations which include stakes in Chinese ecommerce group Alibaba and US telecoms operator Sprint, as per the report in FT.
The Tokyo-based telecoms and technology group said its global operations would be led by Nikesh Arora, the former Google executive, while Ken Miyauchi would head its domestic company in Japan. About $81bn of investments in telecoms, technology and internet businesses held at the group level will be transferred to each company by the end of the year, said the report.
For the global business, this will include Starburst, a holding company for the majority of the shares in Sprint, and its one-third stake in Alibaba. SoftBank would retain full ownership of both companies.
The shift in corporate strategy comes as Masayoshi Son, SoftBank’s founder and chief executive, considers the next stage in the growth of the company. He wants to transform it from a Japanese group with overseas holdings into a more fully fledged international conglomerate.
In the company’s last annual report, Mr Son wrote that “the reality is that most internet companies in Japan find it very challenging to develop their businesses overseas”. He blamed this on trying to apply Japanese business models on local markets, “where cultures are completely different”.
He added that Mr Arora would help drive the company’s “transformation into a truly global company”. The company’s international business has struggled in the past year.
Shares in Alibaba have fallen about 15 per cent in the past 12 months, while Sprint’s stock has dropped more than a quarter in that period in a fiercely competitive US telecoms market.
Alibaba and Sprint are the two largest overseas holdings for SoftBank, although it has invested in other large technology companies including mobile gaming group Gung-ho, Indian online retailer Snapdeal and Didi Kuaidi, China’s largest ride-hailing app. SoftBank has also invested in hundreds of smaller start-ups, a strategy that was being overseen by Mr Nikesh Arora, in a bid to replicate the success it had as an early investor in Alibaba.
