Sometimes the motivations and rationale between a larger merger make little sense to outside observers. This was the case with the 2017 acquisition of Fortress Investment Group by SoftBank. The deal, which was approved by the shareholders of Fortress Investment Group in July of 2017, made little sense to outside observers. It was difficult to comprehend why an entity such as SoftBank that focused on acquiring tech startups would want to acquire an investment firm such as Fortress Investment Group. However, those with an understanding that both SoftBank and Fortress Investment Group have been able to grow by expanding business models over the years know that this deal makes sense for both entities.
SoftBank initially started as a wholesaler of PC software before expanding to become a firm that acquired over 400 different companies in the tech field. Similarly, Fortress has grown over the years to become an investment firm with a diverse portfolio and innovative growth strategy. It makes sense for both of these firms with an ability to adapt and grow in a changing environment would merge and pursue longterm growth strategies together. The 2017 acquisition of Fortress by SoftBank signals that SoftBank intends to grow to be one of the largest investment companies in the world instead of merely being a tech holding company.
Furthermore, SoftBank entered this deal with an understanding that Fortress is performing well and there should be little interference by SoftBank. Indeed, SoftBank is adhering to the common wisdom which dictates that if something is not broke then there is no need to fix it. However, this wisdom is not common in the world of large scale mergers where one would expect an entity such as SoftBank to take a more hands on approach. SoftBank hopes that time will show that its strategy will payoff in the longterm.
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