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The board of NTT Docomo Inc. is holding a meeting Tuesday to discuss Nippon Telegraph & Telephone Corp.’s plans to turn its wireless carrier unit into a wholly owned subsidiary, a move that may help Prime Minister Yoshihide Suga’s push to lower phone tariffs.

The buyout could be worth as much as 4 trillion yen ($38 billion), based on a 30% premium to Monday’s closing price in Tokyo, the Nikkei newspaper reported earlier. Given that parent NTT already controls 66% of the wireless carrier, any proposal is all but guaranteed to pass. The transaction may be announced as soon as today.

The deal to buy Docomo would be the largest tender offer for a Japanese company in history. When NTT spun out Docomo in 1998, it was also the biggest-ever initial public offering at the time. The proposal to combine the former national companies comes just 15 days after Suga’s appointment as prime minister. He has made a reduction in the mobile bills charged by Docomo and Japan’s other major carriers a priority for his new administration.

“It’s likely that one of the goals here is for NTT to push for lower rates," said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. “It’s hard to cut profitability when you have public shareholders, but if it’s done within NTT and there’s a way to make up for any cuts, then it will be easier to do."

The shares of Docomo were untraded as of mid-morning in Tokyo, as buy orders outpaced offers. NTT shares, which are trading today without the right to the next dividend, declined as much as 3.7%. Docomo remains Japan’s sixth-biggest company by market value, according to Bloomberg data.

“This matter is scheduled to be submitted to a meeting of the board of directors held today," Docomo said in a statement, adding that it would “make an announcement promptly" once a decision is made.

One key question is how NTT plans to finance the deal. The carrier had 1.09 trillion yen ($10.3 billion) in cash and equivalents at the end of March. Japanese law requires the government to hold at least one third of NTT, which would make it difficult for the company to issue new shares to raise funds.

“We think the funds for the tender offer would all come from cash on hand and borrowings," Mitsunobu Tsuruo, an analyst at Citi Research, wrote in a report. “The deal would in the short run place a heavy burden on NTT’s finances and likely cap shareholder returns, in particular buybacks."

Even so, NTT appears to be getting Docomo at a discount, thanks to Suga’s push to lower wireless fees. Shares in Docomo are down more than 9% in Tokyo since his predecessor Shinzo Abe announced his resignation last month, wiping almost $10 billion off its market value.

With government documents showing data-heavy users in Tokyo pay more than three times for a monthly contract than users in Paris, reducing phone bills would be a quick win and therefore a priority for Suga to avoid being seen as a caretaker leader, market watchers have said.

In 2018, Suga led a series of attacks against the mobile operators when he was chief cabinet secretary under Abe. While encouraging Rakuten Inc. to enter the market and scrapping fees aimed at discouraging customers from switching carriers, his campaign met with some success but did little to introduce true competition. Since first announcing his intention to take over as prime minister, he has continued to raise the issue.

“In order to solidify his position, he must quickly deliver on some popular economic reforms and has likely already created a battle plan for a few," John Vail, chief global strategist at Nikko Asset Management, wrote in a report. “Lowering mobile phone costs likely are first on the list, as such will be the most popular with voters. Emphasis on the digitalization of the economy and antiquated government services is also likely popular and, thus, next on the list."

Taking Docomo private will allow NTT to better handle the negative impact of lower mobile bills, the Nikkei said. In a mid-term plan in 2018 amid Suga’s attacks, Docomo had already signaled its profits would drop until fiscal 2023.

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