Softbank agrees to US board veto in Sprint deal
The Japanese technology group Softbank will let the United States government have veto power over one nominee to Sprint Nextel's board to ease security concerns if itsUS$20.1 billion takeover bid succeeds, a person familiar with the matter said.
The government-approved director will monitor national security issues relating to SoftBank's takeover of Sprint, the third-largest US wireless carrier, said the person, who asked not to be named because the negotiations are private.
Mitsuhiro Kurano, a spokesman for SoftBank in Tokyo, declined to comment.
SoftBank has also pledged not to integrate equipment from Huawei Technologies into Sprint's network because of American politicians' fears that the Chinese company could aid intelligence agencies.
The SoftBank deal is being reviewed by the Federal Communications Commission, the US Justice Department and the inter-agency Committee on Foreign Investment, which checks for any security implications involved in foreign purchases of US companies.
The issue has provided ammunition to Dish Network, the satellite TV provider that made a US$25.5 billion counterbid for Sprint last month.
Dish said this week that the steps SoftBank was taking "do not adequately protect our national security interests". As a US company, Dish would not face the same review from the Committee on Foreign Investment in the United States, or CFIUS.
Stanton Dodge, Dish's executive vice-president and general counsel, said: "If the news reports are accurate, SoftBank's agreement to an extraordinary board structure and the concerns of CFIUS with respect to the use of Chinese-manufactured equipment on a foreign-controlled Clearwire network, which reportedly could add as much as US$1 billion to the cost of the proposed SoftBank Sprint transaction, confirm the serious national security risks of SoftBank acquiring Sprint."
Sprint agreed to SoftBank's takeover plan in October, forging a deal that would give the Japanese company a 70 per cent stake.
Sprint continues to recommend the SoftBank transaction, even as it opens up its books to Dish.
Sprint said this month that it would give private financial data to Dish, letting it build a case for its competing bid.