Softbank Corp. said Thursday that it and Cisco Systems Inc. of the United States have agreed to strengthen their partnership through capital cooperation and launch an investment fund for Internet infrastructure in the Asia-Pacific region.
Softbank said it will issue 5.56 million new shares to Cisco Systems for 23.36 billion yen on Feb. 13, giving the California-based computer network equipment maker a 1.65 percent equity stake in Softbank.
The leading Japanese Internet investor said it plans to use the revenue from the new share allocation to invest in broadband wireless infrastructures, other wireless businesses, and mergers and acquisitions.
Under the agreement, Softbank and Cisco Systems will establish a new investment fund -- the Softbank Asia Infrastructure Fund -- with $1.05 billion, to be run by Softbank. The new fund will specialize in investments in Internet infrastructure in the Asia-Pacific region for the next few years, Softbank said.
Softbank said it also agreed to sell some of its stake in Cisco Systems' Japanese subsidiary -- Cisco Systems K.K. -- for $275 million to the U.S. parent company.
Softbank currently owns 12 percent of Cisco Systems K.K. The company declined to disclose what percentage of equity it will maintain in the U.S. company's subsidiary after the sale.