Softbank to buy rival eAccess for $2.3B

Japanese mobile operator Softbank will acquire its smaller rival eAccess in a deal worth 180 billion yen (US$2.3 billion) as it moves to boost its available bandwidth and LTE (long-term evolution) services to compete with other domestic players NTT Docomo and KDDI.

Bloomberg reported Monday that in a stock swap, Softbank will pay 16.74 of its shares for every eAccess share, or 52,000 yen (US$667) each. This is nearly triple that of eAccess' Friday closing price, and values the company at 180 billion yen (US$2.3 billion)

Softbank President Masayoshi Son said his company was not overpaying for eAccess. "With this agreement, we'll be able to offer the best broadband services," he said.

He added last month's release of Apple's iPhone 5, which works with the faster LTE standard, was one motivating factor for the deal as the company awaits the launch of the device in Japan later in the year.

The acquisition is expected to be completed by Feb. 25, 2013, when eAccess will become a wholly-owned unit of Softbank, Bloomberg reported.

The acquisition will allow Softbank, the country's third-largest carrier, to use eAccess' bandwidth to expand its coverage to cope with the proliferation of data traffic as more people use smart mobile devices in the country, as well as move it closer to KDDI, the No. 2 carrier, said another report by The Wall Street Journal.

Softbank was previously the only carrier in Japan that sold the iPhone until that monopoly ended last September when KDDI announced it got the rights to sell the iPhone 4S that was released a month later.