Shares of NTT Docomo (T: 9437) soared more than 15% after its majority shareholder Nippon Telegraph and Telephone Corp (T: 9432) announced plans to pay 4.25 trillion yen ($40 billion) to take its wireless carrier unit private.
This way, Nippon Telegraph and Telephone will buy 34% of NTT Docomo shares which it doesn’t own. The price is set at 3,900 yen, which represents an upside of over 40% compared to yesterday’s closing price.
The Japanese giant hopes to cut wireless prices after the new PM Yoshihide Suga asked for a price-cutting campaign to boost consumer spending. It hopes to finance the deal with loans from the three biggest banks in the country.
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“NTT Docomo’s financial base will become stronger giving us the capacity to cut prices,” Jun Sawada, CEO of NTT said in a press conference.
NTT Docomo share price soared over 15% to 3213.0 and, therefore, erase all losses from the past week. On the other hand, shares of Nippon Telegraph and Telephone closed nearly 3% in the red.
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