NEW YORK – Billionaire business tycoon Masayoshi Son said on Tuesday he would invest $50 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 U.S. telecoms giant Sprint Corp., 82 percent-owned by Son’s SoftBank Group Corp., might rekindle merger talks with T-Mobile U.S. Inc that died under pressure from U.S. 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 startup companies in the United States.
“We are going to invest $50 billion into the U.S. 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 Jan. 20 inauguration.
Son’s well-timed meeting with Trump is introducing U.S. audiences to a side of the billionaire already familiar in Japan — a consummate showman.
Son, who rose to global prominence when SoftBank acquired Sprint in 2013, is known overseas primarily as a savvy investor and entrepreneur. But the Japanese have long seen his dramatic side, like the time he choked up on stage remembering his difficult upbringing, with a giant black-and-white photo of his immigrant grandmother hovering in the background.
SoftBank’s strategy of investing in startups which employ relatively few people means Son may struggle to deliver on his job promise. The 50,000 target exceeds the combined workforce of Sprint, SoftBank’s most recent acquisition ARM Holdings Plc and its e-commerce unit Yahoo Japan Corp.
Japan’s second-richest man has a 300-year plan for his worldwide technology empire and is fond of speaking about the imminent advent of advanced artificial intelligence. Son often teams up with SoftBank’s Pepper robot for company announcements. He also likes to poke fun at his balding pate to the delight of his 2.5 million Twitter followers.
While Son is a celebrity in Japan, he has a long way to go in the U.S. Addressing local media after the meeting, Son had to explain that SoftBank is not the manufacturer of Apple Inc.’s iPhone and he is not in fact the CEO of Foxconn Technology Group, the Taiwanese company that makes the smartphones.
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 6.2 percent to close at ¥7,387 on Wednesday in Tokyo.
“Now the market sees SoftBank as a Trump-related 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 U.S. to take on U.S. market leaders AT&T Inc. and Verizon Communications Inc.
Shares of Sprint briefly reached their highest level in 2½ years, soon after Son’s comments. They closed up 1.5 percent to $8.17 in heavy trading, ending well below session highs. Shares of T-Mobile U.S. were up 1.8 percent at $55.99.
It was not immediately clear how much of SoftBank’s investment had been disclosed before. SoftBank said on Nov. 7, the day before the U.S. 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 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 U.K. chip design firm Arm Holdings for $32 billion this year in Japan’s largest ever outbound deal.
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