Japanese telecom giant SoftBank has finalized a $20.1 billion deal to buy 70% of American wireless carrier Sprint, reports the AP. The deal announced in Tokyo today is the biggest-ever foreign takeover by a Japanese company and still needs to be approved by Sprint shareholders and American regulators. The deal would give Sprint, America's third-largest wireless carrier, the funds to compete with AT&T and Verizon, but the deal looks like a risky move from SoftBank, which is already deeply in debt, the Wall Street Journal notes.
Shares in SoftBank have lost more than a fifth of their value since news of the deal first surfaced last week, Reuters reports. The Japanese company is gambling that the American market will offer better prospects for growth than its stagnant homeland. "There is always a risk when you face a big challenge," SoftBank's billionaire founder Masayoshi Son said at a briefing today. "It could be safe if you do nothing and our challenge in the US is not going to be easy at all. We must enter a new market, one with a different culture, and we must start again from zero after all we have built. But not taking this challenge will be a bigger risk."