Sprint files for FCC approval for Softbank deal
NEW YORK Nov 15 (Reuters) - Sprint Nextel on Thursday asked the Federal Communications Commission for approval of its agreement to sell 70 percent of the company to Japan's Softbank Corp.
Softbank announced a plan to spend $20 billion to take control of Sprint, the No. 3 U.S. mobile provider, on Oct 15.
The companies, which expect the deal to be completed by mid-2013, need FCC approval for the transfer of control of Sprint's spectrum licenses to Softbank.
Sprint, the biggest shareholder in Clearwire Corp, said that the application also requests approval for Softbank to take over its stake in Clearwire.
They will also require a go-ahead from the U.S. Department of Justice. Analysts have said that they expect the U.S. to approve the deal without much controversy as it doesn't change the number of competitors in the market.
Sprint, which trails behind market leaders Verizon Wireless and AT&T Inc, said in the filing that the Softbank investment would improve the market "by creating a more vibrant rival" to compete with AT&T and Verizon Wireless.
It said it would use Softbank's infusion of $8 billion in new capital to strengthen its balance sheet and increase its network investment.
Because it is selling more than 25 percent of the company to a foreign entity Sprint had to ask for a declaratory ruling to gain approval for the deal.
Since Softbank is a Japanese company, and Japan is a member of the World Trade Organization, there is no reason why the deal should not be approved as the FCC has previously approved acquisitions by other WTO members of U.S. companies.
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