Softbank of Japan said on Monday that it will buy a smaller rival, eAccess, for about $2.3 billion in stock, as the cellphone service provider seeks to bulk up its market share in the face of intensifying competition.
Under the terms of the deal, Softbank will pay 52,000 yen per share, more than three times eAccess' closing price of 15,070 yen on Friday.
The proposed merger would make Softbank the second-biggest network operator in Japan, behind only NTT DoCoMo. Monday's transaction would give the company more than 39 million subscribers, propelling it over KDDI.
The deal reflects Softbank's desire to bolster its mobile broadband capacity as it looks to attract more smartphone users. It had been the sole network with the iPhone in Japan until last year, when KDDI began offering the popular Apple smartphone as well.
In particular, Softbank is moving to expand its LTE high-speed services as the iPhone 5 goes on sale in Japan. Adding eAccess would give it 50 percent more LTE base stations, up to an expected 30,000 by March.
Shares in eAccess leaped 26 percent on Monday, to 19,000 yen, while those in Softbank slumped 1.7 percent, to 3,105 yen.
