The dramatic $20 billion merger of SoftBank Corp (OTCMKTS:SFTBF) (TYO:9984) and Sprint Nextel Corporation (NYSE:S) has gotten the nod from the Foreign Investment Committee in the US. The committee that monitors national security issues between companies told it sees no national security issues in the acquisition of Sprint by a Japanese company, reports Reuters.
The Committee on Foreign Investment in the U.S. (CFIUS) cleared the proposed merger on Wednesday, revealed Sprint. As per the norm, both companies have signed a National Security Agreement with the U.S. government, which includes that the companies involved will not create any issues after the merger.
The announcement from Sprint Nextel Corporation (NYSE:S) follows a report released yesterday, claiming the companies have got the national security approval.
Even now, Sprint is not able to come up with a specific date when the deal will be completed.
Terms not made public
As per the agreement, the U.S. government will enjoy a veto power in matters of equipment purchases by Sprint Nextel Corporation (NYSE:S) under certain situations. The deal also allows the government to appoint a four-member oversight committee to ensure the companies are following the national security rules. The committee will have one member from Sprint, reported Reuters, citing a source as these terms were not made public.
According to the sources, SoftBank agreed on the terms from U.S. authorities to remove the equipments made by China’s Huawei Technologies Co Ltd. Also, SoftBank Corp (OTCMKTS:SFTBF) (TYO:9984) President Masayoshi Son told that, if asked by the regulators, he is ready to remove the equipment produced by China’s ZTE Corp.
Earlier, SoftBank Corp (OTCMKTS:SFTBF) (TYO:9984) did announce to appoint a security director if the merger is completed. The government-approved director would have looked over the national security issues concerning the merger of SoftBank and Sprint Nextel Corporation (NYSE:S).
The offer from the Japanese firm came amid full-fledged PR blitz by rival DISH Network Corp. (NASDAQ:DISH) in an attempt to derail the merger talks.
DISH Network Corp. (NASDAQ:DISH) spokesman raising security issue, said earlier “Oversight and accountability for our national network infrastructure is critical at a time when offshore attacks on that infrastructure continue to rise.”
Last Friday, U.S. Senator Charles Schumer also raised voice on the proposed merger, saying the deal might expose the United States to Chinese cyber attacks.
Sprint – Softbank Dramatic deal
The deal is dramatic in the sense that, last October, Japanese mobile operator SoftBank Corp (OTCMKTS:SFTBF) (TYO:9984) announced to buy 70 percent stake in U.S. based Sprint Nextel Corporation (NYSE:S). The deal ran into trouble after rival DISH Network Corp. (NASDAQ:DISH), a U.S. satellite TV provider, came up with a counter bid of $25.50 for Sprint.
The merger deal between SoftBank Corp (OTCMKTS:SFTBF) (TYO:9984) and Sprint Nextel Corporation (NYSE:S) was reviewed by the Federal Communications Commission, the U.S. Justice Department and the inter-agency Committee on Foreign Investment.