Cisco Taking Stake in Softbank

Thursday, January 25th 2001, 12:00 am

By: News On 6

TOKYO (AP) â€” Japanese Internet giant Softbank Corp. plans to sell a small stake in itself to network equipment maker Cisco Systems Inc. for $200 million, both sides said Thursday.

The two companies, which already had close relations, are strengthening their ties to tackle the growing Asian Internet business.

Tokyo-based Softbank plans to develop Internet services in the broadband, wireless and Internet service-provider sectors, as well as in Internet-related technology by strengthening its relations with Cisco.

Softbank said it will issue 5.56 million new shares at 4,197 yen ($36) a share to Cisco Systems, whose stake will be at least 1 percent.

Softbank and Cisco Systems also agreed to set up a $1.05 billion fund to invest in Internet businesses in the Asia-Pacific region, the companies said. Cisco Systems will provide all the capital, and Softbank will manage the fund.

And Softbank plans to sell most of its holdings in Cisco Systems' Japanese unit, Cisco Systems KK, to Cisco Systems for about $275 million, they said. Softbank would not say how many shares it was selling, but it now has a 12-percent stake in Cisco Systems KK.

``This is one of the most significant ventures Softbank has undertaken to date,'' said Softbank President Masayoshi Son.

Softbank â€” which has stakes in more than 600 Internet companies worldwide including Yahoo! and CNET â€” plans to use the cash it raises to invest in high-speed and wireless-related projects, it said.

``The Internet presents us with an extraordinary opportunity,'' said Cisco President John Chambers. ``Both Cisco and Softbank are dedicated to making strategic investments to further the development of the Internet in Asia and throughout the world.''

Also Thursday, Softbank announced it was investing $120 million in biotechnology by setting up a subsidiary to administer venture capital in the sector in the United States and Europe, and later in Asia. Softbank is urging banks and other companies to take part in the venture, it said.