Joe Fagan

Former Soccer Star, Now Soccer Fan

August 24, 2018

Fortress Investment Group Continues to Operate Separately from Parent Company

Recently, the Japanese company, Softbank, acquired Fortress Investment Group for $3.3 billion, which signifies a new step for the ever-expanding company. Founded in 1981 by Masayoshi Son, Softbank has consistently maneuvered from sector to sector, finding considerable success, most notably in 1996, when they garnered a controlling share of Yahoo. The acquisition of Fortress Investment Group by Softbank will not bring about very many changes to the growing investment firm, as it will continue to function without interference from its new parent company. This decision was put into place in an effort to circumvent a number of regulatory issues that would have been issued by the Committee on Foreign Investments. There were still a number of hurdles during the process of finalizing the deal. With Softbank acquiring Fortress Investment Group, the investment firm lost its position on the New York Stock Exchange, while the holding conglomerate had to pay a premium of 39 percent to current shareholders, totaling to an $8.08 gain per share. Softbank also had several other significant transactions in the works, including its acquisition of Boston Dynamics, and a 25 percent share of Arm Holdings, that was transferred to their Vision Fund.

In an effort to ensure that the acquisition of Fortress Investment Group would go through, Masayoshi Son aligned himself with President Donald Trump, subsequently offering to invest $50 billion in the United States; President Trump went on to highlight the efforts of Softbank in 2017 during a joint session of Congress. Over the years, Fortress Investment Group has experienced a number of successful ventures during its rise to prominence, including a major leap in 2007, as it “became the first private equity firm in the United States to be publicly traded.” Despite being delisted from the New York Stock Exchange and becoming the first private equity firm to undergo the process, the top brass at Fortress, particularly co-chair, Wes Edens, believe that this move will offer the company a newfound freedom, stating that “the team won’t miss the regular earnings calls.” In the future, Softbank plans to utilize its $93 billion Vision Fund alongside Fortress, but in a separate capacity.

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