Sprint Connection

SoftBank-Sprint deal reportedly has national security approval

Updated: 2013-06-25T15:34:23Z

Bloomberg

SoftBank Corp.’s $20.1 billion takeover of Sprint Nextel Corp., the third-largest U.S. wireless carrier, appears to have passed a national security review by U.S. officials, according to a person familiar with the matter.

The Committee on Foreign Investment in the U.S. and the two companies reached an security agreement following a thorough review of the proposed transaction, the person said.

The agreement, which could be announced any time, would remove a hurdle to the deal to give Tokyo-based SoftBank control of Sprint.

Holly Shulman, a committee spokeswoman, and Scott Sloat, a Sprint spokesman, declined to comment, as did a SoftBank representative.

Dish Network Corp., which has made a $25.5 billion counteroffer for Sprint, has said allowing SoftBank to control a U.S. phone network would compromise national security. SoftBank uses some network gear made by Chinese manufacturers, and Sprint’s joint venture partner, Clearwire Corp., has Huawei Technologies Co. equipment in part of its network. Both carriers have said they plan to discontinue purchases and dismantle network equipment provided by Chinese companies.

The terms of the agreement include the appointment of at least one director to Sprint’s board to keep an eye on national security, and provisions that will allow the government to approve non-U.S. vendors, the person said. The agreement also has a provision to remove from Clearwire’s network equipment made by vendors that haven’t won national security approval, if Sprint concludes a separate transaction to acquire full ownership of Clearwire.

Separately, The Wall Street Journal reported that the agreement included a four-member committee to monitor security concerns, including the security director on the board.

SoftBank has also agreed to establish a small subsidiary with separate operations that would handle classified government work under a related national security agreement.

Similar provisions were put in place when Paris-based Alcatel combined with Murray Hill, N.J.-based Lucent Technologies Inc. and also when Bermuda-based Global Crossing Ltd. got an investment from Singapore Technologies Telemedia Pte.

Deal Saver Subscribe today!

Comments

The Kansas City Star is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

The Kansas City Star uses Facebook's commenting system. You need to log in with a Facebook account in order to comment. If you have questions about commenting with your Facebook account, click here