Japan's Largest Phone Firm Expands with $3.2 Billion Deal
Nippon Telegraph & Telephone (NTT) is acquiring Dimension Data (DDT:UK) in a $3.2 billion deal, as Japan's largest telephone company seeks to expand its global footprint and offer up new services to take advantage of cloud computing.
NTT's acquisition comes as its market at home is reaching a saturation point and it aims to quickly expand through acquisitions. Satoshi Miura, NTT's president, said Dimension has been expanding in Africa, South America and the Middle East were the Japanese Telco's "service offering has been lacking," according to a Bloomberg report.
Dimension builds, supports and manages IT systems for the telecommunications industry, which dovetails with the IT systems integration work that NTT provides, in addition to its telephone, mobile and Internet services.
"By leveraging the complementary strengths of both companies, we are confident that we will provide end-to-end, global-one-stop and high quality [Information and Communication Technology] services," Miura said in a statement. "Dimension Data and NTT share the common vision to create new services and values to succeed in the coming age of cloud computing. Our combined strength will allow us to accelerate the execution of our strategies to achieve our shared vision," .
Africa is an emerging market in the telecommunications industry. The region, as well as other countries that have vast rural areas, are seeking to meet the communications needs of its residents through wireless technologies but face challenges such as an underdeveloped infrastructure.
As part of the deal NTT will pay investors of the South African company an 18% premium over Dimension's closing price on Wednesday. The deal is expected to be finalized in October.