Trump woos Asian firms

SoftBank’s Son pledges $50 bil­lion

Kuwait Times - - BUSINESS -

NEW YORK: Two of Asia’s big­gest tech­nol­ogy com­pa­nies said they were look­ing to ex­pand in­vest­ment in the United States, as Pres­i­den­t­elect Don­ald Trump pushes to bring man­u­fac­tur­ing and jobs back home. Bil­lion­aire busi­ness­man Masayoshi Son, also the head of Ja­pan’s SoftBank Group Corp, pledged a $50 bil­lion in­vest­ment in the United States, and Ap­ple Inc sup­plier Fox­conn said it was in pre­lim­i­nary dis­cus­sions to ex­pand its US op­er­a­tions.

Son said on Tues­day, af­ter meet­ing Trump, his in­vest­ment would cre­ate 50,000 new jobs, a move the US Pres­i­dent-elect claimed was a di­rect re­sult of his elec­tion win. The in­vest­ment pledge re­vived spec­u­la­tion that US tele­coms gi­ant Sprint Corp, 82 per­cent owned by SoftBank, might rekin­dle merger talks with TMo­bile US Inc that died un­der pres­sure from US reg­u­la­tors. The lack of de­tails on the in­vest­ment timetable also prompted doubts on 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 fis­cal 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 he 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 $50 bil­lion in­vest­ment, an­nounced jointly by Trump and Son in the lobby of the Trump Tower in Man­hat­tan, would come from the $100 bil­lion tech 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 the jobs by in­vest­ing in startup com­pa­nies. He also said 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 Jan. 20 in­au­gu­ra­tion.

Son’s busi­ness part­ner Fox­conn is­sued a brief state­ment af­ter a re­port by broad­caster CNBC show­ing a snap­shot of a page held by Son out­lin­ing the in­vest­ment car­ry­ing the lo­gos of SoftBank and the Tai­wanese firm, for­mally known as Hon Hai Pre­ci­sion In­dus­try Co. “While the scope of the po­ten­tial in­vest­ment has not been de­ter­mined, we will an­nounce the de­tails of any plans fol­low­ing the com­ple­tion of di­rect dis­cus­sions be­tween our lead­er­ship and the rel­e­vant US of­fi­cials,” the Fox­conn state­ment said. Son and Fox­conn founder Terry Gou are con­sid­ered close and have sev­eral busi­ness ven­tures to­gether, in­clud­ing launch­ing hu­manoid Pep­per - which is man­u­fac­tured by Fox­conn - into sev­eral mar­kets, and in­vest­ing jointly in In­dia.

In Oc­to­ber, prior to the elec­tion, SoftBank said Saudi Ara­bia’s Pub­lic In­vest­ment Fund (PIF) would be the lead part­ner in the $100 bil­lion tech 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 jumped 6.2 per­cent yes­ter­day in Tokyo to their high­est since Au­gust last year. “Now the mar­ket sees SoftBank as a Trumprelated stock and that’s be­cause it re­acted fa­vor­ably 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 per­cent, while shares of T-Mo­bile US rose 1.8 per­cent. It was not im­me­di­ately clear how much of SoftBank’s in­vest­ment had been dis­closed be­fore. SoftBank said on Nov 7, the day be­fore the US elec­tion, it planned to make fu­ture larges­cale in­vest­ments via the $100 bil­lion fund, rather than on its own, to avoid grow­ing al­ready­bloated 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 Nov 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.

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