US national-security clearance of Softbank-Sprint deal hits Huawei

The US national security clearance of SoftBank Corp's US$20.1 billion acquisition of Sprint Nextel Corp imposes the first restrictions on a third-party supplier over claims of Chinese spying.

Tokyo-based SoftBank and Sprint on Wednesday said they had been notified their proposed deal was cleared by the US Committee on Foreign Investment, an interagency group that vets non-US acquisitions.

The deal needs one more US regulatory clearance.

The companies earlier gave assurances they would limit use of telecommunications equipment made by Huawei Technologies, named in a congressional report as a cybersecurity risk to US companies because of ties to the Chinese military.

SoftBank and Sprint, as a condition of the security clearance, agreed the US could compel Sprint to remove "certain equipment" and approve future vendors, according to a filing by Sprint.

Huawei and ZTE Corp, China's largest phone-equipment makers, have disputed allegations in an October report by the House Intelligence Committee that their expansion may boost US exposure to cyberattacks and spying.