T-Mobile US Inc. won U.S. national-security approval for its takeover of Sprint Corp., one of the regulatory conditions needed before the two wireless carriers can combine.
The Committee on Foreign Investment in the United States, or CFIUS, has approved the proposed transaction, the companies said in a joint statement Monday.
The approval moves the nation’s No. 3 and No. 4 wireless providers closer to consummating their $26.5-billion tie-up in a bid to better compete against industry leaders AT&T Inc. and Verizon Communications Inc. Their focus now shifts to securing approval from the Federal Communications Commission and the Justice Department’s antitrust division.
Sprint shares were up 2% at $5.94 shortly before 8 a.m. Tuesday. T-Mobile shares were up 0.6% at $65.20.
CFIUS reviewed the deal because T-Mobile and Sprint are owned by foreign companies: Deutsche Telekom AG, the parent of T-Mobile, and SoftBank Group Corp., which owns Sprint. Deutsche Telekom, based in Bonn, Germany, would own 42% of the new company, while Tokyo-based SoftBank would own 27%.
The U.S. departments of Justice, Homeland Security and Defense submitted a filing with the Federal Communications Commission that the group has reviewed the transaction pertaining to potential issues of national security, law enforcement and public safety, Sprint and T-Mobile said in the statement Monday.
The deal’s completion is expected in the first half of 2019, according to the statement.
CFIUS, which is led by the Treasury Department, is responsible for ensuring that foreign investment in U.S. companies doesn’t pose risks to national security. It pays particular attention to deals involving critical infrastructure like wireless networks.