On Tuesday, Softbank Group Corp hiked after announcing its stock-swap deal with Deutsche Telekom.
Softbank sharply spiked 9.86% or 623.00 points to $6,943.00 per share.
The Japanese holding company invests in breakthrough technology such as telecommunications, internet services, AI, smart robotics, IoT, and clean energy technology providers.
SoftBank signed a complicated deal that includes its acquisition of 225 million shares of Deutsche Telekom.
In exchange, the German telecommunications carrier receives 45 million T-Mobile US shares.
Consequently, Deutsche Telekom plans to pick up another 20 million T-Mobile shares by reinvesting the proceeds from its sale of T-Mobile Netherlands.
As a result of this transaction, Softbank ended up with 4.50% of Deutsche Telekom.
In addition, it will retain its 3.30% stakes in T-Mobile, which could reach up to 6.90% as the company continues to hit milestones.
The transaction positively diversified the connections of Softbank.
Moreover, Softbank will access over 300 million customers across Japan, Europe, and the US.
In addition, it will include 95 million users who finance Deutsche Telekom services.
Furthermore, SoftBank said that the Deutsche Telekom and T-Mobile shares could be utilized as collateral for financing and hedging purposes of the company.
The company has a current market capitalization of $10.83 trillion and revenue of $5.83 trillion.
Meanwhile, SoftBank Group’s telecommunications unit also announced plans to build one of Japan’s most prominent startup incubation centers in Japan’s Aichi Prefecture.
SoftBank won a $131 million contract to design and construct the facility named Station Ai, situated in Nagoya.
This is to develop startups valued at $1 billion in the country as the facility will be completed in 2024.
Deutsche Telekom Shines on Softbank Deal
Moreover, Deutsche Telekom deepened its bet on wall street after the announcement of its deal with Softbank.
The transaction highlighted that the German-based company now focuses on the US market.
Consequently, the stock-swap deal will lift Deutsche Telekom’s stake in T-Mobile US by 5.00% to 48.40%.
In addition, SoftBank agreed to lock up its shares in the telecommunications company until December 2024.
Remarkably, Deutsche Telekom is the largest telecommunications provider in Europe.
Furthermore, the company has quarterly revenue of $27.30 billion.
It also has a market capitalization of $100.80 billion and shares outstanding of 4.74 billion.
In the Frankfurt Stock Exchange, Deutsche Telekom shares soared 0.80% to $21.43 per share in early trading.