NEW YORK Nov 15 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
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
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.