Sprint, SoftBank Deal Likely Finished by May
Regulators Likely to Green Light Deal With Few Conditions
The FCC this week stated that Softbank's $20 billion acquisition of Sprint is on track for a late May ruling, with all signs pointing to approval. The FCC's 180 day "shot clock" for approval ends on May 29. The CEOs of SoftBank, Sprint, and Clearwire all met with the FCC last week to push for approval of their various deals, including Sprint's acquisition of Clearwire. In a research note to investors
this week, Stifel analysts Christopher King and David Kaut stated they believe the deal will see approval without many conditions:
The comments also reinforce our expectation that the Commission will approve the transactions, unless market developments intercede. If the deals were raising heavy regulatory objections, our sense is the chairman would probably be more circumspect about timing...The FCC could still impose some merger conditions. Spectrum aggregation is a particular focus of some parties that say all of Clearwire’s 2.5 GHz band is both "suitable" and "available" for mobile broadband, and should thus be counted
toward the agency’s spectrum screen that triggers heightened scrutiny.
By "some parties," the analysts mean Verizon, who pushed for heightened regulatory scrutiny of the deal
given it would create a far tougher competitor for the company. AT&T has also tried rather unsuccessfully to use xenophobia to raise questions about the deal
. The DOJ had previously asked the FCC to delay approval
so they could finish up routine national security and law enforcement analysis of letting a Japanese carrier own such a large stake in the company.
Stifel analysts argue that the DOJ could impose conditions intended to address any potential political issues with SoftBank's ties to Huawei and ZTE. Accusations of Chinese spying through routine network hardware has reached hysterical levels of late, regardless of whether those concerns are supported by actual evidence