By Thomas Wilson and Julie Zhu
TOKYO/HONG KONG (Reuters) - Japan's SoftBank Group Corp (T:9984) is close to making an investment in U.S. office-sharing startup WeWork expected to be worth over $3 billion, CNBC reported on Monday, as it expands its reach beyond tech and telecoms.
Led by founder Masayashi Son, SoftBank has made a string of surprising acquisitions and investments over the past months, most recently an all-cash deal to buy asset manager Fortress Investment Group (N:FIG).
The deals come as SoftBank moves towards cutting-edge tech investments as telecoms services markets mature, announcing last year the creation of a tech investment fund with Saudi Arabia that could grow to $100 billion and make the group one of the world's largest private equity investors.
SoftBank is looking at a $2 billion primary tranche of funding in New York-based WeWork, followed by a secondary round worth more than $1 billion, CNBC reported, citing an anonymous source.
The company could increase the size of the secondary investment to nearly $2 billion for a total investment of almost $4 billion, CNBC added. If the deal closed, WeWork would be valued at more than $20 billion.
SoftBank and WeWork declined to comment.
SoftBank had been in discussions for some time regarding an investment, two people at one of WeWork's investors said, without elaborating.
WeWork, which provides shared workspaces to start-ups in the Americas, Europe, Hong Kong and Shanghai, plans to expand to Beijing in May, co-founder Miguel McKelvey told reporters in Hong Kong last week.
It will continue to raise capital for expansion ahead of an expected public listing, McKelvey said, without indicating a time frame.
Chinese private equity giant Hony Capital, its backer Legend Holdings Corp (HK:3396) and property developer China Oceanwide Holdings Ltd (HK:0715), among others, last year ploughed $700 million into WeWork.
The deal valued WeWork at $16.7 billion, Hony said - less than that reported by CNBC but still making it among the world's most valuable startups.
SoftBank shares fell as much as 2.3 percent in morning trade, compared with a 1.4 fall for the benchmark Nikkei average (N225).
SoftBank, a diverse company that holds stakes in U.S. carrier Sprint (N:S), Chinese e-commerce giant Alibaba (N:BABA) and other firms, last year bought chip designer ARM Holdings (LON:ARM), Britain's most valuable technology company, for $32 billion.
Son also promised a $50 billion investment and 50,000 new jobs in the United States after meeting U.S. President Donald Trump in early December.
Some of SoftBank's moves have caused concern among analysts, as it is wrestling with a heavy debt pile.