Nippon Telegraph and Telephone Corp, NTT (News - Alert), in an effort to expand into overseas markets, announced it is buying South African IT firm Dimension Data for up to $3.2 billion.

Johannesburg, South Africa-listed Dimension Data shares jumped more than 20 percent after Japan's top telecoms operator announced the bid.

NTT plans to launch a tender offer for all outstanding shares in Dimension Data, a major reseller for Cisco Systems (News - Alert), which provides IT-related services in the United States, Europe and Asia.

NTT will finance the acquisition through a combination of its own cash and debt. The deal would mark the largest acquisition of a firm in sub-Saharan Africa by a Japanese company, according to Thomson (News - Alert) Reuters data.

NTT said it is offering to buy Dimension Data at $1.84 per share, representing a premium of 18 percent to its London-listed shares' closing price on Wednesday.

In the past, NTT group had been hit hard by making wrong bets on overseas investments.

Its mobile phone unit NTT DoCoMo (News - Alert) suffered huge losses as the result of its stake-taking spree in overseas rivals during late 1990s and early 2000s. The soured investments in AT&T (News - Alert) Wireless Services, KPN Mobile, Hutchison 3G UK and others cost NTT DoCoMo about $13.6 billion in losses. The company later sold off these stakes.

Shares of NTT closed down 1.6 percent at 3,705 yen, after the news was first reported by Japan's Nikkei business daily. The benchmark Nikkei average fell 1.1 percent.

Asian rivals have been aggressively establishing a presence in Africa.

Bharti Airtel Ltd last month completed a $9 billion acquisition of mobile operations in 15 African countries from Kuwait's Zain (News - Alert) in a deal that made the Indian firm the world's fifth-biggest cellphone company by subscribers.

Also last month, China Mobile Chief Executive Wang Jianzhou (News - Alert) told Reuters that the world's biggest mobile-phone carrier is looking for acquisitions in Africa.