4. What lies ahead for Sprint in the telecom sector? The SoftBank-Sprint Merger: 2012–2019 Within the topics of cross-border mergers and acquisitions

(M&As) and global business environment, this case analyzes and discusses SoftBank’s 2013 acquisition of Sprint, which at the time was the third largest mobile telephone firm in the U.S. Unlike other multinational corporations (MNCs) from Japan, SoftBank at the time of the merger was a high-flying telecom, technology and Internet firm that had grown by leaps and bounds since its inception in 1981. SoftBank bought Sprint for $21.6 billion and continues to be one of the major telecom and Internet firms in Japan with revenues of over $80 billion.

In 2019, SoftBank also announced its proposal to merge with T-Mobile, a well-known German telephone company which is owned by Deutsche Telecom.

In the history of U.S.-Japan business relations, the SoftBank-Sprint merger was the largest purchase by a Japanese firm in North America, which caused concerns among the telecom companies in the U.S. The case analyzes pre- and postmerger developments that took place in the SoftBank-Sprint tie-up and negotiations. The acquisition also revealed complexities in the negotiation process which emerge from global business and firms’ corporate rivalries. Because of its timeliness, the case contributes to the debate of cross-border M&As and expansion in the telecom industry.

In global business, cross-border M&As are common and are used by companies to seek growth and global expansion.

At the same time, cross-border M&As are often impacted by complex forces and regulatory hurdles. Other factors may include firms’ bargaining tactics, corporate agendas, and investor-specific strategies. Cross-border M&As can also become highly complex because of firms’ marketing operations and intertwined global business activities.2 Such was the case when SoftBank of Japan acquired Sprint in 2013. The $21.6 billion acquisition of Sprint by SoftBank represented a major corporate breakthrough in the business world. Behind this high-profile acquisition, we witnessed a major achievement on the part of SoftBank’s CEO Masayoshi Son and his corporate team and investors from Japan and North America (see Figure 1). Along with other fast growing high-tech firms from East Asia (see Alibaba, Baidu, Foxconn, Rakuten, Samsung, Tencent, etc.),3 SoftBank stands out in the crowded telecom and Internet market because of its marvelous initiatives, bold acquisitions, and high-profile growth.