NTT to Acquire NTT Data for 163 Billion USD, Boosting AI Capabilities

NTT, the Japanese telecommunications giant, has announced its plans to acquire NTT Data Group Corp., a significant move that underscores the company's strategic focus on artificial intelligence (AI) and organizational streamlining. The acquisition, valued at approximately 2.37 trillion yen (around 163 billion USD), is set to bolster NTT's AI capabilities and simplify its corporate structure. The settlement for this acquisition is scheduled to commence on June 26.

NTT currently holds about 58% of NTT Data's shares. In May, the company initiated a tender offer to acquire the remaining shares at 4,000 yen per share, aiming to fully privatize the subsidiary. As one of the world's largest data center operators, NTT Data's acquisition will position AI as a core business for the NTT Group, facilitating the expansion of its various business units into global markets.

The Japanese government, which owns roughly one-third of NTT's shares, is actively promoting the development of domestic AI platforms to compete with international rivals. In this competitive landscape, NTT is vying with other major players in the burgeoning AI sector.

This strategic move by NTT also aligns with regulatory pressures faced by corporate groups. In February, the Tokyo Stock Exchange issued a special warning to companies with parent-subsidiary listing structures, urging them to better protect the rights of minority shareholders and further reduce such structures. Following this, NEC Corporation completed the acquisition of its subsidiary, while Toyota Motor Corporation's chairman has plans to acquire Toyota Industries. These developments have sparked market speculation about more companies following suit.

NTT's acquisition of NTT Data is part of a broader trend within the company to streamline its operations and focus on high-growth areas. In 2020, NTT acquired its cash cow business, the wireless operator NTT Docomo, demonstrating its commitment to strategic restructuring. The acquisition of NTT Data will not only enhance NTT's AI capabilities but also simplify its corporate structure, making it more agile and responsive to market demands. This move is expected to strengthen NTT's position in the global AI market and drive innovation across its various business units.

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