SoftBank’s Son pledges $50 billion, Foxconn eyes US expansion as Trump woos Asian firms
Two of Asia’s biggest technology companies said they were looking to expand investment in the United States, as President-elect Donald Trump pushes to bring manufacturing and jobs back home.
Billionaire businessman Masayoshi Son, also the head of Japan’s SoftBank Group Corp <9984.T>, pledged a $50 billion investment in the United States, and Apple Inc
Son said on Tuesday, after meeting Trump, his investment would create 50,000 new jobs, a move the U.S. President-elect claimed was a direct result of his election win.
The investment pledge revived speculation that U.S. telecoms giant Sprint Corp
The lack of details on the investment timetable also prompted doubts on 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 fiscal 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 he 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 $50 billion investment, announced jointly by Trump and Son in the lobby of the Trump Tower in Manhattan, would come from the $100 billion tech 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 the jobs by investing in startup companies.
He also said 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 business partner Foxconn issued a brief statement after a report by broadcaster CNBC showing a snapshot of a page held by Son outlining the investment carrying the logos of SoftBank and the Taiwanese firm, formally known as Hon Hai Precision Industry Co <2317.TW>.
The page also showed an additional $7 billion investment and creation of a further 50,000 jobs. (//cnb.cx/2he38VQ)
“While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials,” the Foxconn statement said.
Son and Foxconn founder Terry Gou are considered close and have several business ventures together, including launching humanoid Pepper – which is manufactured by Foxconn – into several markets, and investing jointly in India.
Foxconn has manufacturing facilities in the U.S. states of Virginia and Indiana, according to its website (//www.foxconngfo.com/factories/usa-indiana). Its 2015 annual report also listed logistics services in California and Texas.
In October, prior to the election, SoftBank said Saudi Arabia’s Public Investment Fund (PIF) would be the lead partner in the $100 billion tech 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 jumped 6.2 percent on Wednesday in Tokyo to their highest since August last year.
“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 US to take on U.S. market leaders AT&T Inc
Shares of Sprint briefly reached their highest level in 2-1/2 years, soon after Son’s comments. They closed up 1.5 percent, while shares of T-Mobile US rose 1.8 percent.
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 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
(Reporting by Steve Holland, Eric Walsh and Malathi Nayak; Additional reporting by Iga Daiki in TOKYO and JR Wu in TAIPEI; Writing by Doina Chiacu, Nick Zieminski; and Miyoung Kim; Editing by Andrew Hay, Lincoln Feast and Muralikumar Anantharaman)