TOKYO -- Japanese technology conglomerate SoftBank Group on Wednesday said it would sell its entire stake in Yahoo Japan for 526.5 billion yen ($4.8 billion), in a transaction that effectively transfers ownership to its mobile unit SoftBank Corp.
SoftBank Group will initially sell its 36.08% stake, currently held by a wholly owned subsidiary, to Yahoo. SoftBank Corp. will then buy new shares in Yahoo for 456.5 billion yen to increase its stake from 12.08% to 44.64%. The 70 billion yen gap between SoftBank Group’s sale price and the mobile unit’s purchase price will be financed by Yahoo’s internal cash.
In a statement, SoftBank Group said it hopes for closer cooperation between its mobile unit and Yahoo to “improve [the] corporate value of the group.” It did not disclose how it will use the proceeds.
The transaction enables the group to monetize mature assets while CEO Masayoshi Son accelerates the organization's transformation to an investment holdings company. The company raised some $18 billion in December by selling around a third of its stake in SoftBank Corp. through an initial public offering.
At the same time, SoftBank Group can maintain some level of control over Yahoo, which is facing slowing growth in its profitable online advertising business. Yahoo’s net profit for the year ended March 2019 fell 40% from the previous year as the company spent aggressively on its mobile payment service, which it positions as the next pillar of growth.
SoftBank Corp. said it will finance the transaction using internal cash and debt. It said the deal will help build closer ties with Yahoo, which runs one of the Japan’s most popular websites, as it seeks revenue streams beyond its core telecommunications business.
“By integrating our resources, we can accelerate Yahoo’s growth and maximize synergies,” SoftBank Corp. CEO Ken Miyauchi said in an earnings press conference on Wednesday.