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TOKYO, Oct 13 (AFP): Japanese telecommunications giant KDDI and Tokyo Electric Power announced a deal Thursday to merge their telecoms operations with the aim of challenging the dominance of industry leader NTT.
Under the accord, KDDI, Japan's second-largest telecoms firm, will acquire TEPCO's telecoms subsidiary, PoweredCom, through a share swap, the two companies said in a statement.
The deal, which is reportedly worth about 100 billion yen (870 million dollars), aims to form a "counterbalancing force against NTT", they said.
With the merger agreement, the nations' fixed-line operations will be dominated by the big three -- NTT, Softbank Corp. and KDDI.
Through the acquisition of PoweredCom, which specializes in fixed-line operations, KDDI aims to strengthen its sagging business in land lines and boost its overall competitiveness in Japan's telecom market.
KDDI will offer 0.0320 of its share for each Poweredcom share, resulting in the issuance of 186.38 million new shares. TEPCO has a 83.81 percent stake in Poweredcom.
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