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Softbank gets OK in Sprint deal

Kyodo, AFP-JIJI

Shareholders of Sprint Nextel Corp. on Tuesday approved Softbank Corp.’s offer to acquire the third-largest U.S. mobile carrier for $21.6 billion, paving the way for the Japanese carrier to enter the American wireless market.

With the acquisition of the No. 3 U.S. mobile carrier, Softbank, the parent of Softbank Mobile Corp., said it would become the world’s third-largest cellphone carrier along with AT&T of the United States in terms of sales, ranking behind China Mobile Ltd. of China and Verizon Wireless, another U.S. carrier.

Softbank issued a statement early Wednesday saying: “We are happy to have received support from many Sprint shareholders. We plan to swiftly complete procedures for this transaction upon receiving approval from the U.S. Federal Communications Commission.”

Softbank anticipates the transaction to be completed early next month.

“The transaction with Softbank should enhance Sprint’s long-term value and competitive position by creating a company with greater financial flexibility,” Sprint CEO Dan Hesse said.

The deal is the largest overseas acquisition ever by a Japanese firm.

After the acquisition, subscribers of Softbank group service units in Japan and the U.S. will total about 97 million. The company aims to slash $2 billion (about ¥195 billion) in annual costs through joint procurement of communication equipment and mobile handsets with Sprint.

The Softbank deal received clearance from U.S. national security officials last month under the condition they appoint an independent member to the Sprint board of directors to serve as security director.

The director, who must be approved by U.S. authorities, would oversee national security matters and serve as a point of contact for Washington.

Last October, Softbank and Sprint agreed that the Japanese firm would pay $20.1 billion to acquire a 70 percent stake in Sprint.

In April, U.S. satellite television provider Dish Network Corp. challenged the buyout plan, making a $25.5 billion bid to acquire Sprint.

To counter Dish, Softbank raised its takeover bid by $1.5 billion, to $21.6 billion, to acquire a roughly 78 percent stake in Sprint.

In its filing with the U.S. Securities and Exchange Commission on June 21, Dish said it decided to abandon its effort to acquire Sprint.

Dish has also made a bid to acquire a greater stake in Clearwire Corp., a wireless Internet company owned 50 percent by Sprint, countering Sprint’s plan to make Clearwire its wholly owned unit to expand its broadband services with the frequency band owned by Clearwire.

The Clearwire board had earlier supported Dish’s buyout plan, but has reversed its stance and recommended its shareholders approve Sprint’s plan after Sprint raised its buyout offer. Prospects for that buyout battle remain uncertain.