Japan’s NTT buys US cloud computing firms for US$875m

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NTT Communications said Monday it would pay a combined US$875 million for two US-based cloud computing firms, marking the latest major overseas acquisition by a Japanese firm.

The telecoms giant said it had agreed to buy Virtela for US$525 million, while it would shell out US$350 million for an 80 per cent stake in RagingWire as it looks to boost its ability to supply online access to software and data storage for big global clients.

The deals come as NTT looks to counter a slowdown in its mainstay long-distance telecom business.

“The acquisition (of RagingWire) will more than double NTT’s data centre space in the US, which will enable the company to respond to high demand for data centre services in North America,” it said in a statement.

It added that the deal was “critical to increasing our overall capacity”.

The global cloud services market for corporate users is expected to reach US$31.9 billion in 2017, a 70 per cent jump from last year.

NTT owns undersea cables and other lines between Europe and the US, but to meet the needs of corporate clients seeking global networks that link offices and plants in different markets, it must obtain line access in each nation from individual providers.

However, Virtela has data networks connecting companies in about 190 countries through partnerships with local data communications providers.

By acquiring the company, NTT would gain instant access to data communication networks that straddle national borders. That would make it easier to set up communication infrastructure for customers scattered worldwide, and cut costs linked to dealing with individual providers.

The deal announced Monday is the latest in a string of acquisitions by Japanese firms, including mobile carrier SoftBank’s US$21.6 billion takeover of US-based SprintNextel earlier this year.

Last month, drinks giant Suntory said it would buy the top-selling Lucozade and Ribena brands from British drugs firm GlaxoSmithKline (GSK) for US$2.1 billion, while bathroom giant Lixil Group agreed to scoop up Germany’s Grohe in a US$4.1 billion deal.

The moves are aimed at expanding beyond Japan’s borders, where firms are wrestling with unfavourable demographics as the population rapidly ages while the birth rate falls.

Despite a sharp decline in the yen since the start of the year, the Japanese currency’s historically high levels in recent years made firms’ overseas acquisitions relatively cheaper.

 

 

 

 

 

Source : Channel News Asia | October 28, 2013

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Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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