Sprint Nextel and potential majority owner Softbank took the next step in consummating their proposed merger with the filing of license transfers with the Federal Communications Commission. The filing is a necessary step in Softbank’s proposed $20 billion acquisition of a 70% stake in the country’s No. 3 wireless operator, which was announced earlier this year.
In the filing, both companies ask for approval for the transfer of control of Sprint Nextel’s spectrum licenses to Softbank as well as transferring Sprint Nextel’s interest in 2.5 GHz spectrum licenses held by Clearwire. The two companies are also requesting the government for special approval of the deal as it will result in a foreign company owning more than 25% of a domestic telecom operator. That provision is not expected to garner too much scrutiny as there is already precedence for such deals, including Germany’s Deutsche Telekom acquiring 100% control of VoiceStream Wireless, now known as T-Mobile USA, and Vodafone Group’s 45% stake in Verizon Wireless.
Analysts have noted they expect the deal will gain government approval as it will not limit competition across the domestic space and will bolster the financial health of the country’s third-largest wireless operator. The deal is expected to close by mid-2013.
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