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NTT Docomo Share Price Gains Over 15% on $40 Billion Deal

Practice Stock Trading
Updated: 29 September 2020

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.

“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 stock price gained on plans to go private September 2020

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.