Intending to further grow its global business outside Japan, NTT DATA Corporation has announced that it will combine the overseas business of NTT, Inc., a wholly-owned subsidiary of Nippon Telegraph and Telephone Corporation (‘NTT’) into the NTT DATA group’s overseas business.
By combining its overseas businesses operated by NTT DATA, NTT, Inc. and NTT Ltd., respectively to develop their business as a unified group of companies, NTT Group will be able to enhance the value provided by it by employing the power to ‘connect’ capabilities of NTT Ltd. In other words, NTT DATA will combine its system integration capabilities in vertical industry expertise, digital consulting, application development, and managed services capabilities with NTT Ltd.’s ‘Edge to Cloud’ service operation capabilities, mainly in the field of data centers, networks and managed services.
By this, NTT DATA will be able to integrate IT services and connectivity and respond to complex and diverse global client needs by centrally developing a service portfolio necessary for digital transformation. It will also be able to make quick decisions and build a strong global governance model by aggregating human resources and properties related to the overseas business of the NTT Group.
Important dates to follow:
October 1, 2022: NTT DATA and NTT will establish an overseas operating company jointly owned by them with a stake of 55% and 45% respectively, to accelerate NTT collaboration in both strategic and tactical aspects for driving the growth of the overseas business.
July 2023: A domestic business company will be established in Japan under the holding company umbrella of NTT DATA.
NTT DATA will be expanding its strategic functions such as technology, delivery and M&A investment. It will also be establishing a structure that enables the domestic and overseas operating companies under this umbrella to promote business following each region’s regulations.
The parties have agreed on a shareholding ratio of 51% for NTTDATA and 49% for NTT, calculated based on the share value, to implement specific initiatives to combine the overseas businesses.
Moreover, NTT DATA has decided to acquire additional shares in the overseas operating company as it will contribute to increasing the value of its shares. NTT DATA has also reached an agreement with NTT to acquire an additional 4% equivalent of shares in the overseas operating company for a total amount of 112 billion yen. This will result in NTT DATA holding 55% and NTT holding 45% of the overseas operating company.