Tags: Sprint | SoftBank | Security | Japan

Sprint, Japan's SoftBank Reach Deal With US Over Security Concerns

Wednesday, 29 May 2013 07:39 AM

Sprint Nextel Corp. and Japan's SoftBank Corp. said on Wednesday they had entered a national security agreement with U.S. authorities related to the Japanese company's pending $20.1 billion deal to win control of the wireless carrier.

The companies said they had received notice from the Committee on Foreign Investment in the United States (CFIUS) that it had completed its review of the proposed deal and that there were no unresolved issues.

The approval is a blow to Dish Network, which launched an unsolicited $25 billion offer for Sprint in April. Dish has mounted an aggressive lobbying campaign, trying to convince Washington decision-makers that SoftBank's ties to Chinese vendors create risks for national security.

The statement from Sprint and SoftBank did not include details of the agreement with CFIUS, a committee that includes the Department of Justice, the Federal Bureau of Investigation and the Department of Homeland Security.

Clearance from CFIUS is the first of several regulatory approvals needed to complete the deal, which now needs to be reviewed by the Federal Communications Commission.

Reuters, quoting sources, reported on Tuesday that as part of an unusual agreement, the government would have a veto over equipment purchases by Sprint in certain circumstances if the companies merged.

There would also be a four-member oversight committee to make sure the companies abided by their national security promises. A decade ago, the telecoms company Global Crossing had a similar arrangement after its acquisition by a Singaporean firm; the committee included retired generals and admirals.

Japanese mobile operator SoftBank agreed to buy a 70 percent stake in Sprint last October.

As part of the deal with CFIUS, the sources said SoftBank had agreed to remove equipment made by China's Huawei Technologies Co. Ltd. from Sprint and Clearwire Corp.'s networks if the deal was completed by the end of 2016.

Sprint shares opened 0.1 percent higher at $7.28, while Dish fell 1.1 percent to $39.68.

© 2019 Thomson/Reuters. All rights reserved.

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Sprint Nextel Corp. and Japan's SoftBank Corp. have reached an agreement with U.S. authorities on the national security aspects of the Japanese firm's pending $20.1 billion deal to win control of the U.S. wireless carrier, people familiar with the matter said.
Wednesday, 29 May 2013 07:39 AM
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