Sprint and SoftBank get clearance from Committee on Foreign Investment, enter into security agreementAlex Wagner - Deputy Managing Editor, News Desk
One of Dish Network Chairman Charlie Ergen's arguments against the proposed transaction between Sprint and SoftBank has been that his American company has an advantage over Japanese carrier SoftBank. Ergen has said that, because Sprint's network will need to be modernized in the U.S. and that it will need "U.S. employees who speak English," Dish is a better fit for Sprint. However, it appears that the U.S. government isn't terribly concerned about the fact that SoftBank is Japanese.
Sprint said this morning that its transaction with SoftBank has been given the green light by the U.S. Committee on Foreign Investment, which found "no unresolved national security issues" related to the deal. As part of gaining clearance, Sprint and SoftBank have entered into a National Security Agreement with the U.S. government. Details of the agreement weren't given, but The Wall Street Journal claims that Sprint must have a four-member national security committee, including one person that will sit on its board. It's also said that the government will be able to veto Sprint network purchases and that Sprint will be required to remove Chinese networking equipment from one of its affiliate networks, a process that could cost around $1 billion.
Sprint and SoftBank expect their transaction to close in July 2013. The deal is not a total slam dunk just yet, as Sprint is still holding negotiations with Dish regarding the latter company's recent bid for Sprint. However, the Sprint-SoftBank agreement certainly got closer to completion with today's news, and I doubt that Dish and Ergen are thrilled about the U.S. Committee on Foreign Investment okaying the transaction. Sprint has scheduled a shareholder vote on the SoftBank deal for June 12, so we should hear more on the matter then.