Britain's mobile phone giant Vodafone is to pay up to $2.6 billion to take control of Japan Telecom, the country's third largest telecommunications carrier.
In an agreed deal, Vodafone will offer to acquire up to 693,368 Japan Telecom ordinary shares, or 21.7% of the total, for 312 billion yen ($2.6 billion), Vodafone said.
The UK firm is already Japan Telecom's largest shareholder with a 45% stake and the bid, if successful, would boost its holding to 66.7%, giving Vodafone management control. Vodafone would also become the largest foreign direct investor in Japan.
The group has offered 450,000 yen a share, an 18.8% premium on the stock's closing price of 378,800 yen.
The chairman and president of Japan Telecom will step down to be replaced by Vodafone-nominated officials once the deal is finalised, the firms said in a joint statement.
In May, Vodafone increased its stake in Japan Telecom to 45% and boosted its shareholding in mobile subsidiary J-Phone to around 60%. Four existing J-Phone operating units will merge into one on November 1 as part of the Japan Telecom's goal to take on number one mobile phone operator DoCoMo.
Japan Telecom recently revised down its earnings forecast for the current year to March, citing intense competition both at home and abroad. Net profit for the fiscal year is expected to come to 27.5 billion yen, down 1.8% from an earlier forecast of 28 billion yen. Pre-tax profit is seen falling 25% to 7.5 billion yen on an unchanged revenue forecast of 480 billion yen.
