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SoftBank-Sprint Deal Faces Small Hurdle

By Craig Galbraith
January 29, 2013 - News

**Editor's Note: Please click here for a recap of the biggest channel-impacting mergers in Q4 2012 or here for the biggest M&A during that time in the service provider-BSS/OSS spaces.**

The Department of Justice wants to take a look at potential national-security issues that could result from a SoftBank-Sprint tie-up, so the agency is asking the Federal Communications Commission to hold off from green-lighting the merger for now.

SoftBank of Japan wants to buy 70 percent of America's third-largest wireless carrier for more than $20 billion. It wouldn't be the first time a foreign company owned all or a significant portion of a U.S. wireless operator – namely Vodafone's 45 percent stake in Verizon Wireless and Deutsche Telekom's ownership of T-Mobile USA – but it requires a review "for any national security, law enforcement and public safety issues" that are yet to be completed, the DoJ wrote in a letter to the FCC.

This probably won't turn out to be a major roadblock. While many red flags have been raised about proposed Chinese buyouts of U.S. companies, a Japanese business is less likely to draw as much governmental scrutiny or concern from lawmakers.

“This is a routine request when working with the [U.S. government] agencies regarding national security," Sprint said in a statement to All Things D.

The merger, which is expected to close in mid-2013, might get its biggest resistance from DISH Network, which earlier this month also asked the FCC to take pause. DISH and Sprint have both made bids for Clearwire, the spectrum-rich broadband provider based in Bellevue, Wash. That contention might create uncertainty with SoftBank-Sprint, DISH noted earlier this month in its own filing asking for a delay in the approval process.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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