New York: Billionaire business tycoon Masayoshi Son said on Tuesday that he would invest $50 billion (Dh183.6 billion) in the United States and create 50,000 new jobs, a move President-elect Donald Trump claimed was a direct result of his election win.
The investment revived speculation that US telecoms giant Sprint Corp, 82 per cent owned by Son’s SoftBank Group Corp, might rekindle merger talks with T-Mobile US Inc
that died under pressure from US regulators.
The lack of details on investment timetable also prompted doubts whether the promise of money and jobs will be met, as Sprint is slashing staff numbers to cut more than $2 billion in costs this year.
Trump’s moves since the election to engage with individual companies, while turning his back on broader, years-in-the-works trade deals, show that the President-elect is leaning on the deal-making skills he honed in the boardroom.
Trump campaigned against the over-regulation of business and is expected to be more open to mergers than President Barack Obama.
The investment, announced jointly by Trump and Son in the lobby of Trump Tower in Manhattan, would come from the $100-billion investment fund the head of Softbank is setting up with Saudi Arabia’s sovereign-wealth fund and other potential partners, according to the Wall Street Journal.
“Ladies and gentlemen, this is Masa from SoftBank of Japan, and he’s just agreed to invest $50 billion in the United States and 50,000 jobs,” Trump said.
“He would never do this had we (Trump) not won the election!” Trump later Tweeted.
Son, who wore a red tie and red sweater under his suit jacket, told reporters his company, a $68 billion telecommunications and tech investment behemoth, would create jobs by investing in start-up companies in the United States.
“We are going to invest $50 billion into the US and commit to create 50,000 new jobs,” said Son, adding that he expected a lot of “deregulation” under a Trump administration.
Trump and Son did not give a timeline for the investment.
Trump’s four-year term will begin after his January 20 inauguration.
In October, prior to the election, SoftBank said Saudi Arabia’s Public Investment Fund (PIF) would be the lead partner in the fund and could invest up to $45 billion over the next five years. SoftBank expects to put in at least $25 billion.
Shares in SoftBank rose 3.8 per cent early on Wednesday in Tokyo after jumping as much as 5.1 per cent to their highest since August last year.
“Now the market sees SoftBank as a Trump-related stock and that’s because it reacted favourably to their meeting,” said Fumio Matsumoto, a fund manager at Dalton Capital in Japan.
Son had hoped to merge Sprint with T-Mobile US to take on US market leaders AT&T Inc and Verizon Communications Inc.
Shares of Sprint briefly reached their highest level in 2-1/2 years, soon after Son’s comments. They closed up 1.5 per cent to $8.17 in heavy trading, ending well below session highs. Shares of T-Mobile US were up 1.8 per cent at $55.99.
It was not immediately clear how much of SoftBank’s investment had been disclosed before. Softbank said on November 7, the day before the US election, it planned to make future large-scale investments via the $100 billion tech fund, rather than on its own, to avoid growing already-bloated debt.
Whether or not Trump’s election led to SoftBank’s planned investment, the billionaire’s victory has been a boon to stock investors. The Dow Jones industrial average closed at another record level on Tuesday, its 11th new high since the November 8 vote.
Should the SoftBank fund grow as large as $100 billion, it would be one of the world’s largest private equity investors and a potential kingpin in the technology sector.
SoftBank, a diverse firm that also holds stakes in Chinese e-commerce giant Alibaba, has been stepping up investment in new areas, as Son aims to make the firm the “Berkshire Hathaway of the tech industry.” It purchased UK chip design firm Arm Holdings for $32 billion this year in Japan’s largest ever outbound deal.
