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This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 18, 2018).

By Drew FitzGerald and Kate O'Keeffe 

T-Mobile US Inc. won approval from U.S. national-security officials for its planned takeover of Sprint Corp., bringing the two rivals a step closer to closing their roughly $26 billion combination.

The Committee on Foreign Investment in the U.S., or Cfius, told the companies Monday that it had cleared the union of the No. 3 and No. 4 carriers by subscribers after several months of negotiations with company representatives, the companies said.

The interagency committee, which is led by the Treasury Department, reviews foreign deals for potential national security issues and can recommend the president block transactions if such concerns aren't resolved. Japanese telecom giant SoftBank Group Corp. owns most of Sprint, while Germany's Deutsche Telekom AG is a majority shareholder of T-Mobile in the U.S.

Additionally, Team Telecom, which includes the departments of Justice, Homeland Security and Defense, confirmed it had no objections to the merger, the companies said.

The deal still needs approval from antitrust authorities at the Federal Communications Commission and Justice Department. T-Mobile executives have said they expect that process to end in the first half of next year.

The Cfius review took place while a host of other U.S. officials waged a separate campaign to persuade allies to cut ties with China's Huawei Technologies Co., which works with Deutsche Telekom and Softbank abroad. These U.S. officials have cited concerns that the Chinese telecommunications giant would use its hardware to spy on foreign networks, which Huawei has denied.

Cfius previously required Sprint to remove Huawei equipment from its U.S. network as part of a 2013 review triggered by SoftBank's purchase of a controlling stake in Sprint. Deutsche Telekom went through a similar process when it entered the U.S. market. But anything that relates to networks overseas is outside the scope of the committee's authority.

Neither Deutsche Telekom nor SoftBank is required to significantly change its own business or operations as a result of Cfius's demands, according to the terms of the merger. Any potential changes are limited to T-Mobile, Sprint and their respective subsidiaries, deal documents show.

Still, the global campaign by the other U.S. national security officials outside of Cfius was bearing some fruit. Deutsche Telekom on Friday said it was reviewing its procurement strategy for vendor equipment given "the global discussion about the security of network elements from Chinese manufacturers." SoftBank last week made similar comments about its network in Japan.

U.S. national security officials are also seeking to rally the private sector to strengthen their campaign against Chinese equipment makers. That effort in recent weeks has included a classified briefing the Senate Intelligence Committee held for representatives of the top four wireless carriers, which include Sprint and T-Mobile, to warn about Huawei's risks, according to people familiar with the meeting.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Kate O'Keeffe at kathryn.okeeffe@wsj.com

(END) Dow Jones Newswires

December 18, 2018 02:47 ET (07:47 GMT)

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