Yahoo Japan has decided not to acquire mobile network operator eAccess Ltd. From SoftBank Corp. for 324 billion yen ($3.2 billion).
The deal was part of Yahoo Japan's plan to merge eAccess with Willcomm, a company that offers wireless services, according to CNET. Willcomm is also owned by SoftBank.
SoftBank owns close to 42 percent of Yahoo Japan. U.S.-based company Yahoo owns about 35 percent of it.
"Yahoo has come to the conclusion that instead of converting eAccess into its consolidated subsidiary and building infrastructure by itself, it would be better for Yahoo and eAccess to collaborate by capitalizing on the strengths of each company, whereby Yahoo would be responsible for services and eAccess would be responsible for infrastructure," eAccess explained on Monday.
Both companies said Yahoo Japan would continue with a low-cost mobile Internet service using the eAccess mobile network, Reuters reported.
The deal was first announced on March 27. Since then, Yahoo Japan has been looking into a 300 billion yen bond issue for Japanese retail investors. The companies said that after the announcement, however, Japan's third-largest mobile carrier chose to offer services through the eAccess network, and eAccess would be a separate company that would own and operate the network infrastructure.
Manabu Miyasaka, president of Yahoo Japan, said after the announcement that in order to gain 10 million additional mobile users, his company would have to have control over its own network and handsets, Reuters reported.
But analysts say they don't understand why Yahoo Japan would buy SoftBank if they are part of the same group. This confusion reportedly led to Yahoo Japan's shares declining by 25 percent.
While the deal is off, eAccess and Willcomm are still set to merge, a business deal that will go into effect on June 1, CNET reported. The new company will be called Ymobile.
After the merger, Yahoo Japan will collaborate with Ymobile to release its own mobile services. The services would be released under a new "Ymobile" brand.
