Yahoo Japan canceled its plan to purchase eAccess Ltd. from the company's largest shareholder, SoftBank Corp., for 324 billion yen, or $3.2 billion.
The planned acquisition was supposedly part of Yahoo Japan's expansion strategy for its business in the wireless data and voice sectors. The deal would also have reorganized the assets of the SoftBank group to form a new Internet service for mobile devices.
Softbank said that after the March 27 announcement of Yahoo Japan's acquisition of eAccess, discussions between the two companies led to the decision that they did not need to merge their businesses. Yahoo Japan said that it will be more effective for the two companies to operate independently.
Industry analysts were skeptical of the price of the deal upon its announcement, as the original agreement had Yahoo Japan paying 80 percent more to acquire eAccess than the cost of 180 billion yen that SoftBank paid to acquire the assets in 2012. In addition, Masayoshi Son controls all three companies.
"It looks like Yahoo Japan is finally standing up to its top shareholder and has refused to take on the minority stake in eAccess from SoftBank," Amir Anvarzadeh, BGC Partners Inc. manager of Japanese equity sales in Singapore, said in an e-mail.
SoftBank, which owns 42.6 percent of Yahoo Japan, said that eAccess will continue with its plans to merge with SoftBank's wireless services unit, Willcom. Yahoo Japan, on the other hand, said that it will continue to push for the "Y!mobile" service with SoftBank but will leave eAccess as a separate company as it develops wireless network infrastructure.
Softbank said that the deal's cancellation will have a minimal effect on the company. SoftBank would have booked a net gain of 55.7 billion yen on the deal this financial year if the deal pushed through. The acquisition was supposed to close in June, to coincide with eAccess' merger with Willcom.
Yahoo Japan dropped 2.8 percent, closing at 411 yen in Tokyo prior to the statement's release. The company's shares have plunged 30 percent this year, compared with a decline of 12 percent in the Topix index. On March 28, Yahoo Japan's shares plunged 6.4 percent to its lowest price in over three months, which was the day after the company revealed its plans to acquire eAccess.
SoftBank paid US$22 billion last year to take over U.S.-based Sprint Corp., as it aims to diversify its business as the population of Japan ages and the company's home market becomes smaller.
