KDDI: KDDI Buys an Equity Position in Internet Initiative Japan

KDDI bought a stake in Internet Initiative Japan Inc. (IIJ), a local operator. Approximately 18 million IIJ shares held by NTT will be acquired by KKDI in an off-market transaction. The deal is valued at approximately $370,1 million. NTT is decreasing its stake in IIJ from just over 22% to 10%, while KKDI is increasing its stake from less than 1% to 11.5%. NTT will consequently lose its position as IIJ's largest shareholder, with KDDI taking it. IIJ was the first ISP in Japan and was founded in 1992. It has constructed one of the largest Internet core networks in the country. The company operates approximately seventeen locations in Japan and five more abroad.

As part of the agreement, IIJ will acquire KDDI communication services, and the two parties will look into opportunities for collaboration and development partnerships. IIJ's market capitalization is close to $4 billion. This month, the company reported revenues of $1.82 billion, an operating profit of $196 million, and a net profit of $135.9 million for the first quarter of 2023. NTT and KDDI are major Japanese telecom companies and global data center providers. NTT operates scores of facilities worldwide under the NTT GDC brand, whereas KDDI operates in fourteen markets through its Telehouse division.