SoftBank to buy Fortress Investment for $3.3 billion in cash

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Japanese Internet and telecommunication giant SoftBank Group said it would buy U.S.-based private equity and asset management firm Fortress Investment Group for about $3.3 billion in cash.

The acquisition deviates somewhat from SoftBank's typical investments into technology and telecom firms such as last year's $32 billion acquisition of chip design powerhouse ARM. But the move to acquire Fortress made sense to at least one analyst, who even called it a "visionary strategy."

Jesper Koll, CEO of WisdomTree Japan K.K., told CNBC's "Squawk Box" on Wednesday that the acquisition would allow the Japanese company to get world-class financial management expertise. "SoftBank is really leapfrogging into the asset management and private equity business."

The financial expertise from Fortress at their disposal could also theoretically boost SoftBank's massive $100 billion technology investment fund — SoftBank Vision Fund — announced last year with Saudi Arabia's sovereign wealth fund. The fund is headed by Rajeev Misra, who, Reuters reported, was previously a senior executive at Fortress and SoftBank hired him in 2014.

In December, then President-elect Donald Trump announced that SoftBank had agreed to invest $50 billion in the U.S., aiming to create 50,000 jobs. But reports suggested the investment was set to come from the SoftBank Vision fund.

To be sure, a spokesman from SoftBank told CNBC by email since the SoftBank Vision Fund wasn't yet finalized, the company could not comment on whether Fortress would have any role to play in it. The spokesman also clarified the funds to acquire Fortress comes from the company and not the SoftBank Vision Fund.

Koll believes in recent months SoftBank has completely transformed itself and he implied that the Fortress acquisition is another indicator of that transformation. "(SoftBank) is a very, very good technology company, but on top of that it actually is building a super platform for a new future," said Koll.

The logo of Japanese mobile provider SoftBank is displayed at an entrance of a shop in Tokyo's shopping district Ginza.
Kazuhiro Nogi | AFP | Getty Images

SoftBank's chairman and CEO, Masayoshi Son, said in a statement the Fortress deal will help the Japanese company expand its capabilities, and along with the SoftBank Vision Fund, it will "accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth."

Fortress, which has $70.1 billion in assets under management as of Sept. 30, 2016, has investments in private equity, hedge funds and real estate among others. According to Reuters, Fortress also has a track record in Japan, where it bought hotels held by Lehman Brothers after the bank collapsed in 2008.

Under the agreement with SoftBank, Fortress shareholders will receive $8.08 per share, which is a premium of 38.6 percent on the closing price on Feb. 13, 2017.

Fortress will still be lead by Pete Briger, Wes Edens and Randy Nardone, and it will operate within SoftBank as an independent business, with its headquarters in New York. Senior fund managers will also remain in place, according to a statement from SoftBank.

Fortress plans to maintain its current base dividend of 9 cents a share for the fourth quarter of 2016.

In morning trade on Wednesday in Tokyo, SoftBank shares climbed 1.20 percent to 8,637 yen.

— CNBC's Akiko Fujita contributed to this report.

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