Sprint, SoftBank gets U.S. security panel approval for merger
Government panel the Committee on Foreign Investment in the United States (CFIUS) has given its approval for Japanese mobile carrier SoftBank to acquire a majority stake in Sprint Nextel in a $20 billion deal.
CFIUS "found that there are no unresolved national security issues associated with SoftBank's proposed acquisition of a controlling interest in Sprint," Sprint said in a Wednesday 8-K filing with the U.S. Securities and Exchange Commission.
The approval, however, does address some national security concerns related to the acquisition. Some critics, including Senator Chuck Schumer, a New York Democrat, had raised concerns that SoftBank's use of Chinese networking equipment could make U.S. networks vulnerable to hacking and spying.
As part of the CFIUS approval, SoftBank and Sprint must appoint a security director, approved by U.S. agencies that make up CFIUS, to serve on the company's new board of directors. The U.S. agencies will also have the right to review and approve network equipment operators and managed service providers for Sprint.
The CFIUS approval was one of the last major hurdles for the deal. The U.S. Federal Communications Commission still must approve the deal before it can be finalized. The FCC approval was on hold while other agencies conducted the national security review.
Sprint still has a pending a $25.5 billion counteroffer from Dish, a satellite TV service provider. This week, SoftBank gave Sprint permission to negotiate with Dish.
Also this week, the California Public Utilities Commission voted to approve the transaction, giving the companies the final state approval needed for the transaction.