Japanese telecom giant Nippon Telegraph and Telephone has announced a takeover bid worth about 40 billion dollars to acquire a 100 percent stake in its wireless subsidiary NTT Docomo.

The move comes as Japan's new Prime Minister Suga Yoshihide said he wants to see lower mobile phone rates in the country.

In a press conference on Tuesday, NTT President and CEO, Sawada Jun said that the takeover will strengthen Docomo's financial base and will enable the company to cut prices.

NTT management is aiming to streamline decision-making to be able to adapt more quickly to new technology and government pressure to cut fees.

NTT currently owns about 66 percent of the mobile carrier which is the most profitable part of the NTT group. Docomo has the most subscribers in the country. The parent company has decided to take full control of Docomo by acquiring the roughly 34 percent of outstanding stock in the company.

Shares of NTT Docomo surged by the daily limit of almost 16 percent in Tokyo following reports of the expected takeover bid. Meanwhile, NTT fell 2.9 percent. NTT Docomo will be delisted from the Tokyo Stock Exchange once the tender offer is completed.

Source: ANNnewsCH