The Understanding in the Acquisition of Fortress Investment Group by SoftBank

Diversification has been one of the main strengths of SoftBank. Since its inception in September 1981, SoftBank has consistently enjoyed success after success. The bank has invested in different sectors such as telecommunication, media, finance, and e-commerce technology. Under the leadership of its founder, Masayoshi Son, the Japanese bank has undoubtedly put its mark in the banking industry. To cement its place, SoftBank has recently acquired Fortress Investment Group.

Fortress Investment Group is one of the leading assets management firms in the world. The Group was founded in 1998 by Randy Nardone, CEO, and Wes Edens, co-chair the firm. In the two decades that the firm has been around, the staff in Fortress have been working diligently. This hard work has led to more people seeking its services. Currently, Fortress has 1750 institutional and private clients.

In the acquisition deal, SoftBank came to an understanding that the operations of Fortress won’t be affected. In line with this understanding, the headquarters of Fortress Investment Group remained in New York City. The effect of this agreement means that SoftBank won’t be involved in the managing of the $ 40 billion worth of assets that Fortress manages.

One may then pose, why folk out all that money yet have an inactive role in the running of the firm? This understanding was one of the conditions that the Committee on Foreign Investments gave for the acquisition to occur. The agency is charged with the duty of over sighting transactions that involve over-sees companies. Also, for SoftBank to seal the deal, they had to pay $8.08 per share which was a 39% percent premium for each share.

Other than this acquisition, Fortress Investment Group has been making positive headlines in the recent past. In 2007, Fortress rose to fame by being the first private entity firm to be publicly traded. It also became that first private entity firm to be delisted from the New York Stock Exchange (NYSE). Wes Edens noted that the firm is still okay with this new development as it was looking to go entirely private. The co-chair said that they are excited to start the new chapter.

SoftBank has also recently acquired a technology investment fund, Vision Fund. This company is the largest technology fund, valued at $93 billion. This acquisition has been raising some speculation on how the fund will be relating to Fortress Investment Group. But this has been resolved by an understanding that both companies will be working alongside each other but independently.

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