Japanese investments in EU M&A mobile payment

net mobile AG majority stake acquired by NTT Docomo

globalizing Docomo’s mobile payment and content services

bringing German mobile know-how to Japan

On September 11, 2009, NTT Docomo announced a voluntary public tender offer for shares of net mobile AG. The tender offer was closed on November 27, 2009, and Docomo Deutschland GmbH acquired 6,126,567 shares at € 6.35 per share corresponding to 79.59% of the company, at a total acquisition cost of € 38.9 million, thus valuing net mobile AG at € 48.9 million.

Acquisition of Bankverein Werther AG to create Net-m Privatbank 1891 AG

On September 22, 2011, NTT Docomo announced the additional investment of up to € 28.4 million (YEN 3.1 billion) in net mobile AG, for the purpose of net mobile AG acquiring Bankverein Werther AG.

The company goes back to the foundation of the financial cooperative “Vorschussverein zu Werther”, which was founded in 1877 in Werther, near Bielefeld in Germany. In 1891, the Vorschussverein zu Werther was transformed into the bank “Bankverein Werther Aktiengesellschaft”. During 2011, Net Mobile AG acquired 93% of shares of Bankverein Werther AG. On December 1, 2011, the traditional banking business, including the trademark “Bankverein Werther” was sold to the regional bank “Volksbank Paderborn-Höxter-Detmold eG“.

With the sale of the traditional banking business and the tradename and brand, the bank reentered the market as Net-m Privatbank 1891 AG. At the end of 2012, Net Mobile AG acquired all remaining shares, so that Net-m Privatbank 1891 AG became a 100% owned subsidiary of net mobile AG.

net mobile AG

net mobile AG was founded on 9 October 2000 in Köln, and headquarters later the same year moved to Düsseldorf (Handelsregister/trade registry No. HRB 48022). In 2001, Net Mobile AG acquired SMS Infowelt. net mobile AG’s business at that time was marking info-SMS, ringing tunes, and other information services for mobile phones.

net mobile AG is a public company, traded at the Frankfurt and München Stock Exchanges (Freiverkehr).

Currently the market cap of net mobile AG is € 77 million (US$ 94 million).

Share ownership (according to the net-mobile website):

  • 87,13 % DOCOMO Deutschland GmbH, a 100& subsidiary of NTT Docomo Inc.
  • 12,87% traded on the Frankfurt and München stock exchanges

net mobile AG subsidiaries

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Finance mobile payment

Mobile payment in EU vs Japan: 10 years to reinvent the wheel?

Mobile payments for transport first introduced commercially in Tokyo January 28, 2006

Tokyo (mobile SUICA, FeliCa) vs. London (OYSTER, Mifare)

Mobile payments are big: Reuters estimates that the mobile payment market will be about US$ 1000 Billion by 2016, and in Japan just a single railway line achieves already now several US$ billion in mobile payments per year.

Mobile payment in London:

On July 17, 2012 The Wall Street Journal reports, that as far as Transport for London is concerned, there is no viable mobile payment solution at this time:

  • Transport for London sees no way to use mobile payments at ticket barriers at this time, because the technology is not advanced enough
  • London’s state-of the art mobile payment transactions take longer than 500 milli-seconds which is too slow for Transport for London requirements

Mobile payment in Tokyo:

While no viable solution has yet been found in London, in Tokyo millions of people use “mobile SUICA” mobile payments every day at Tokyo’s rail, subway, tram lines and buses:

  • mobile payments at ticket barriers were first demonstrated in Tokyo in 2003 (photo below shows a demonstration at a trade show in Tokyo in 2004)
  • “mobile SUICA” mobile payments were commercially introduced to the public since January 28, 2006
  • payment transactions take 100 milli-seconds or less, which would fulfill Transport for London’s speed requirements
  • in addition mobile SUICA also has a full e-money function, and can be used at 1000s of stores all over Japan for payments, and for 1000s km of high-speed trains all over the main island of Japan, between Hakata and Aomori.

Why does it take at least ten years to reinvent the mobile payment wheel in London?

Why is it that a problem the solution of which was demonstrated in Tokyo in 2003 and put to commercial use every day since January 28, 2006 without any problems, has not yet been solved in London even today?

The answer to this question is of course complex, and you will find elements of a discussion of this question on pages 185-188 of our mobile payment report (click here for free download which includes pages 185 – 188, pdf-file).

In our opinion the answer for this huge delay even today in the age of globalization and internet is a combination of:

  • human nature and
  • the huge communication gap and disconnect between European organizations and companies and Japanese organizations and companies and
  • the totally different way in which banking systems, payment systems, and also the commercial structure and way of thinking of transportation companies are organized regulated in EU vs Japan.

We have been working on mobile payment and e-money issues here in Tokyo for about 10 years or longer, and you may be interested in some of our reports:

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