Japan's KDDI reportedly plans to acquire major Japanese ISP Biglobe for an estimated 70 billion to 80 billion yen ($614.8 million to $702.9 million) to help boost its position in the fixed line market.
The operator has reached an in-principal agreement with Biglobe over the planned acquisition, the Nikkei reported, citing unnamed sources. An official announcement is expected in the near future.
With the acquisition, KDDI would jump from the seventh-largest fiber broadband operator by subscribers in Japan to the second largest behind NTT Communications.
From its current base of 1.27 million, KDDI would grow to have around 3.7 million fiber customers, representing a market share of nearly 13%.
According to the report, KDDI is also in the final stages of negotiations over the acquisition of another Japanese ISP – Fujitsu subsidiary Nifty.
Biglobe was originally established by NEC, but span out of the company in 2006 and was acquired by private equity company JIP in 2014. The deal was said to be worth nearly $264 million for NEC.
KDDI is seeking to expand and diversify its operations beyond the telecoms business due to sluggish smartphone sales. The company is exploring moving into new areas including electricity and e-commerce, and is absorbing Biglobe's customers as part of this push, the report states.