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Softbank CEO Masayoshi Son confirms deal to sell Flipkart stake to US retail giant Walmart

Tokyo: The head of Japanese technology company SoftBank Group Corp. said Wednesday it has reached an agreement to sell its stake in Indian e-commerce company Flipkart to Walmart.

Softbank founder and CEO Masayoshi Son did not give details in confirming the deal, which has been widely anticipated. He mentioned the agreement while discussing the company's quarterly results.

Son did say he was doubling his initial investment with the sale. An official announcement is coming soon, he said.

In a separate deal, already announced but awaiting US regulatory approval, SoftBank plans to give up some of its stake in US wireless company Sprint, under a $26.5 billion merger deal that will combine it with T-Mobile.

Tokyo-based SoftBank reported Wednesday January-March its profit totaled 24 billion yen ($219 million), down from 580.5 billion yen the previous year.

 Softbank CEO Masayoshi Son confirms deal to sell Flipkart stake to US retail giant Walmart

File photo of Masayoshi Son, Softbank Group CEO. Reuters

Quarterly sales totalled 2.35 trillion yen ($21 billion), up 1 percent from 2.32 trillion yen.

SoftBank's sprawling empire encompasses telecommunications, financial-technology, solar energy, ride-booking services and the Pepper companion robot.

Results have improved dramatically at previously money-losing Sprint. Sprint recently reported its best-operating income in its company history spanning more than a century.

SoftBank, the first telecoms carrier to offer the iPhone in Japan, will continue to own 27 percent of the company formed by the merger of Sprint and T-Mobile. It will keep some managerial influence, although it will no longer control it.

Son said the merged entity will become a winner in the US amid an ongoing move to the next wireless technology of 5G.

Son said much of SoftBank's recent profits are coming from the investments of its Vision Fund, set up in 2016.

He stressed his fund was banking on what was sure to be a winner in the future, and not like the old-style "zaibatsu" companies of Japan Inc.

The SoftBank Vision Fund was set up to invest in innovative companies with money from Saudi Arabia, as well as other investors like Apple.

One such company is Britain's ARM Holdings, an innovator in the "internet of things." That investment, he said, was exemplary of SoftBank's vision, given how widespread ARM's chips are in mobile devices found everywhere.

"People in advanced companies are likely buying five ARM chips in their products a year," Son said.

Also as part of the Vision Fund moves, Son announced earlier this year a $200 billion solar power project in Saudi Arabia, which he described as "the world's biggest solar power generation."

That also illustrates a vision, he said, noting that most of the dozens of nuclear reactors in Japan are still offline after the 2011 nuclear disaster in Fukushima, northeastern Japan, because of beefed-up safety standards and lingering public fears.

Son said the swings in SoftBank's overall annual profit came from a one-time perk related to Alibaba, a Chinese e-commerce company, which had inflated earnings the previous year, and a one-time derivative accounting-related loss this year.

In its operations, outside such one-time blips, Alibaba was booming, he said.

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Updated Date: May 09, 2018 15:26:36 IST

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