SoftBank secures US security approval over Sprint deal
30 May 2013 | Kavit Majithia
Japan’s SoftBank has moved a step closer to acquiring a 70% stake in Sprint after it won US national security clearance on the deal.
The Committee on Foreign Investment in the US gave SoftBank the approval, despite objections from rivaling bidder Dish Network, which has portrayed Softbank as a national security threat.
Dish has lobbied against the deal by claiming that the SoftBank bid was a security threat because it uses equipment on its network that is manufactured by Chinese vendor Huawei.
SoftBank and Sprint have both made several concessions to get the approval, with the companies allowing a US veto power over a security director on the new board of the company. The director will oversee all security related matters.
Both companies have also declared to remove certain equipment deployed on the Clearwire network by 2016, if Sprint’s proposed acquisition of the US wireless provider goes ahead. The US government has also struck an agreement with the joint entity to approve all future network equipment suppliers, after it deemed Huawei a national security risk late last year.
The FCC is now free to continue to review the Sprint deal, and the process should be completed in a week, according to sources close to the situation. Sprint shareholders must also approve the deal, and a voting process is scheduled for 12 June.
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