NTT’s $16.5 Billion Power Play: The First Domino in Japan’s Buyout Bonanza?

Image Source: CNBC TV18

Japan's business world is buzzing with Nippon Telegraph and Telephone (NTT) announcing a historic move to take over NTT Data in full, marking a new wave of big-ticket buyouts and corporate restructuring in the nation.

Key Highlights

Mega Tender Offer: NTT, Japan's leading telecom group, unveiled a tender offer to buy all remaining NTT Data shares at ¥4,000 per share-a 34% premium on Monday's close-valuating the offer at about ¥2.37 trillion ($16.5 billion). The offer, May 9 through June 19, will have NTT Data be delisted at completion.
Strategic Rationale: The acquisition will help to speed up the convergence of telecommunications and IT services, putting NTT in a position to take advantage of the exploding demand for AI infrastructure and digital transformation. NTT Data, which is already a global IT leader with more than 150 data centers, will be a wholly owned subsidiary, facilitating decision-making and enhancing competitiveness.
Market Reaction: News of the deal sent NTT Data shares soaring by their daily limit, hitting a 25-year high, while NTT’s stock dipped 2.1%. The move follows NTT’s previous high-profile buyout of NTT Docomo in 2020 and reflects a broader trend of Japanese parent companies absorbing listed subsidiaries.
Industry Impact: The transaction is likely to encourage further buyouts and mergers in Japan, where parent-child listings are still prevalent. It follows a spate of high-profile M&A deals, including recent actions by Toyota and foreign interest in Japanese assets.
Financial Strength: For the fiscal year ended March 2025, NTT Data expects consolidated revenue of ¥4.43 trillion and operating profit of ¥336 billion, highlighting its strong growth path.