SoftBank Investors Cheer CEO's Meeting With Trump

Features Dow Jones Newswires

TOKYO�Investors welcomed a meeting between SoftBank Group Corp. Chief Executive Masayoshi Son and U.S. President-elect Donald Trump, saying it raised the prospects that the company could revive a megadeal in the U.S. mobile-phone market.

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Shares of the Japanese internet and telecommunications giant rose 6.2% in Tokyo trading on Wednesday and closed at their highest level in more than a year, adding more than $4 billion to the company's market capitalization.

SoftBank already owns most of U.S. wireless carrier Sprint Corp., and several years ago aggressively pursued a possible acquisition of rival T-Mobile US Inc. But Mr. Son had to give up because of opposition from Obama administration antitrust regulators.

After the president-elect met Mr. Son for 45 minutes at Trump Tower in New York and praised him as "one of the great men of industry," investors concluded SoftBank might have better luck with the new administration.

"By forging stronger ties with the incoming president, Mr. Son has raised expectations that he might pursue a merger again," said Tomoichiro Kubota, a senior market analyst at Matsui Securities.

Mr. Son said he would invest $50 billion in the U.S. and create 50,000 new jobs. While details of the plan remain unclear, Mr. Son said he planned to invest in startups, and said the money would come from a $100 billion investment fund he plans to start soon with Saudi Arabia's sovereign-wealth fund and other partners.

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Speaking to reporters after the meeting, Mr. Son said he expected government regulatory policies to change under Mr. Trump. "Because he would do a lot of deregulation, I said this is great. [The] U.S. will become great again," Mr. Son said.

Mr. Son declined to discuss any possible T-Mobile deal. A spokesman at SoftBank headquarters in Tokyo declined to comment.

Mr. Son has been working to turn around loss-making Sprint since SoftBank took control of the U.S. mobile carrier for $22 billion in 2013.

He initially hoped to fix Sprint's woes by merging it with rival T-Mobile, and led a charm offensive with U.S. officials that included a meeting with Caroline Kennedy , U.S. ambassador to Japan, in which he told her, "I love America." But the plan was dashed when regulators said U.S. consumers could suffer if the number of nationwide carriers fell to three from four.

As president, Mr. Trump will appoint key regulators including the chairman of the Federal Communications Commission.

Hitoshi Sato, senior analyst at InfoCom Research, said the regulatory climate "could be more open" under Mr. Trump. But he cautioned that some Americans might object to having two of the four nationwide carriers ultimately controlled from Tokyo.

"Mr. Trump is a shrewd businessman, and he has said he will put America first. I'm not so sure how he will view a Japanese company merging the nation's largest mobile carriers," Mr. Sato said.

Deutsche Telekom AG of Germany holds a roughly 66% stake in T-Mobile US, which also trades publicly in the U.S. and had a market capitalization of $45 billion as of Tuesday's close.

Masayuki Kubota, chief strategist at Rakuten Securities, said it was getting harder to read Mr. Son's strategy after he spent $32 billion this year buying U.K. chip designer ARM Holdings PLC.

"He spent a ton of money buying ARM and pledged to double the number of its employees, and now he's making promises to Mr. Trump. It is getting more difficult to figure out the direction SoftBank is heading in," Mr. Kubota said.

Since SoftBank's 2013 acquisition, Sprint has fallen behind T-Mobile to fourth place in terms of subscribers. But there are signs that turnaround efforts�including aggressive price cuts and cost-cutting measures�are taking hold at the Overland Park, Kan., company. In October, Sprint reported a narrower loss in the latest quarter and continued to add customers, posting year-over-year revenue growth for the first time since its takeover by SoftBank.

Mr. Son, who had acknowledged disappointment in Sprint's performance, said last month that the turnaround would "leave a mark on U.S. economic history." But analysts say Sprint is still far from taking on market leaders AT&T Inc. and Verizon Communications Inc. on its own.

Write to Alexander Martin at alexander.martin@wsj.com