British telecom carrier Vodafone PLC is in final talks to acquire a 15 percent stake in Japan Telecom Co. for roughly $2.5 billion, industry sources said Monday.
Vodafone, the largest mobile phone operator in Britain, is considering buying shares in Japan Telecom held by Central Japan Railway Co. (JR Tokai) and West Japan Railway Co., two of the seven domestic railway firms that founded it, the sources said.
East Japan Railway Co. is the largest shareholder in Japan Telecom, holding a 15.1 percent stake. British Telecommunications PLC and AT&T Corp. of the United States each own 15 percent.
The deal would tie Vodafone with BT and AT&T as Japan Telecom's second-largest shareholders. Vodafone owns shares in four companies of the J-Phone group, Japan Telecom's fast-growing mobile phone arm. By becoming a major shareholder, Vodafone aims to have a greater say in the J-Phone companies, the sources said.
The Financial Times reported Monday, "The deal will give Vodafone the upper hand in its battle with BT to take control of J-Phone." Vodafone controls 26 percent of J-Phone Communications Co., the mobile group's holding company, while BT owns 20 percent.
Vodafone is believed to be consolidating its influence on the J-Phone group to challenge NTT DoCoMo Inc., the market-leading mobile phone unit of NTT Corp.
JR Tokai and JR West own a combined 17.6 percent of Japan Telecom's shares, and AT&T is reportedly thinking about dumping its stake now that it has teamed up with competitor NTT DoCoMo.
BT is also in talks with AT&T "but is thought to be wary of buying the entire stake," according to the Financial Times.