Japanese holding conglomerate, Softbank, recently acquired Fortress Investment Group for $3.3 billion. This major move is consistent with the trajectory of Softbank since its inception by Masayoshi Son in 1981, as they have often stressed the diversification of their portfolio. Fortress Investment Group, one of the leading private equity firms in the United States, as well as the first to go public on the New York Stock Exchange, will continue to operate independently of its new parent company. While it may seem strange that a company would invest such as a significant amount in a company that they would have little control over, this was done in order to circumvent a variety of hurdles that would have been presented by the Committee on Foreign Investments.
Despite agreeing to the condition of remaining hands-off regarding Fortress Investment Group, Softbank was still required to pay a premium of 39 percent to the shareholders, resulting in an $8.08 increase to their shares. Fortress also lost its position on the New York Stock Exchange, but this recent delisting seems to be of little concern to co-chair, Wes Edens, who believes their new status will lead to increased freedom. Over the years, Fortress has experienced a wide array of successes which culminated in a major leap in 2007, as they became the first private equity firm to be traded publicly. During the acquisition process, Softbank also had a number of separate transactions in place, including the transfer of their stake in the Uk’s Arm Holdings to their $93 billion Vision Fund, which was also subject to approval.
The founder of Softbank, Masayoshi Son, also worked behind the scenes to secure significant public backing regarding the acquisition of Fortress Investment Group. He quickly received the support of US President, Donald Trump, who offered his public support of the company during a joint session in Congress in 2017; the President’s backing was secured after Masayoshi Son pledged to invest heavily in the United States. According to the heads of Softbank, Fortress Investment Group will act separately, but alongside their Vision Fund, for a parallel cause.
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