Sprint says panel clears proposed sale to SoftbankAP , Associated Press
May. 29, 2013 8:51 AM ET
OVERLAND PARK, Kan. (AP) — Sprint and Japan's Softbank said Wednesday that regulators haven't found any unresolved national security issues related to Softbank's proposed $20.1 billion deal for control of the No. 3 cell carrier.
The clearance from the Treasury Department's Committee on Foreign Investment in the United States comes amid concerns by some officials that Softbank's use of Chinese networking equipment could open up U.S. networks to snooping and hacking if the deal were to go through.
Sprint and Softbank said Wednesday that with the completion of the committee's review they have entered into a national security agreement with the U.S. government. As a result, they expect that the Department of Justice and the Department of Homeland Security to soon notify the Federal Communications Commission that they've completed their national security review.
Once that happens, the FCC can complete its review.
Softbank wants to buy 70 percent of Sprint for $20.1 billion in a deal is set to close in July. But last week, Sen. Charles Schumer urged regulators to "use extreme caution" when reviewing the proposed, saying that the deal could make American companies and government agencies much more susceptible to Chinese cyber attacks.
Satellite TV broadcaster Dish Network Corp., which has a competing, $25.5 billion offer for all of Sprint, also has raised the security issue as one reason Sprint shareholders should prefer its bid.
The Pentagon said this month that China appeared to be engaged in cyber spying against the U.S. government, but Chinese authorities dismiss the allegations. There have been no reports of Chinese-made networking equipment helping the hackers.
Softbank has offered to remove the Chinese-made equipment that's already in Sprint's network to assuage security concerns.
Sprint shares rose 2 cents to $7.29 in premarket trading.