Japan-based Softbank is looking to purchase a major stake in U.S.-based network operator Sprint Nextel.
Sprint on Thursday said via a news release that it is "currently engaged in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint," confirming reports from various news sources that there are talks going on between the two carriers. Sprint did not provide financial deals of the talks.
The Wall Street Journal on Thursday reported that Softbank, which is Japan's third-largest carrier after NTT DoCoMo and KDDI, said the deal could be worth more than $12.8 billion, citing an unnamed source close to the negotiations.
Such a deal would give Softbank major control of Sprint Nextel, a company with a total market capitalization of $15 billion, the Journal reported.
Softbank's other acquisitions in the carrier market include the Japanese arm of Vodafone in 2006 and this year's purchase of Japan-based eAccess.
There is also speculation that Softbank, if it invests in Sprint Nextel, might look to expand its U.S. presence even further with another acquisition, perhaps Clearwire, which is partly owned by Sprint Nextel, the Journal reported.
Softbank's investment bid for Sprint Nextel comes at a time of flux in the U.S. carrier market. Deutsche Telekom earlier this month penned a deal to merge its T-Mobile USA unit with rival U.S. carrier MetroPCS.
Steve Hilton, principal analyst with Burlington, Mass.-based analyst firm Analysys Mason, wrote Thursday in a research report that a Softbank investment in Sprint would be a good move for customer satisfaction, given the traditional Japanese focus on a "very results-oriented approach to dealing with customers."
Hilton also wrote that such a move would give U.S. consumers better access to the latest in Japanese electronics
Furthermore, Hilton wrote, both Softbank and Sprint have CDMA networks, which could lead to possible cost savings from larger purchase volumes from network vendors.
Chad Berndtson contributed to this story.
PUBLISHED OCT. 11, 2012