T-Mobile, Sprint win US security approvals for merger

T-Mobile and Sprint, the third- and fourth-largest US wireless carriers, are set to merge. Above, a T-Mobile and Sprint store sit side-by-side in a strip mall in El Cerrito, California. (Getty Images)
Updated 18 December 2018
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T-Mobile, Sprint win US security approvals for merger

  • The firms’ respective foreign owners, Deutsche Telekom AG and Japan’s SoftBank Group Ltd offered to stop using Huawei Technologies equipment
  • Many governments around the world have shut out Huawei amid worries its gear could facilitate Chinese spying

WASHINGTON: T-Mobile US Inc. and Sprint Corp. have won backing for their $26 billion merger from two national security reviews, clearing key hurdles in their tie-up bid.

The deal got a nod from the Committee on Foreign Investment (CFIUS) in the United States as well as the Justice Department, Department of Homeland Security, and Defense Department — collectively referred to as Team Telecom, the companies said.

The merger between T-Mobile and Sprint had been expected to get an all clear from CFIUS after sources said that the firms’ respective foreign owners, Deutsche Telekom AG and Japan’s SoftBank Group Ltd, had offered to stop using Huawei Technologies equipment.

People familiar with the deal said last week that US officials had pressured Deutsche Telekom to stop using Huawei gear, and the companies believed they had to comply to win approval from CFIUS, headed by the Treasury Department.

Many governments around the world have shut out the Chinese firm amid worries its gear could facilitate Chinese spying. While T-Mobile and Sprint do not use Huawei equipment, Deutsche Telekom and SoftBank use some Huawei gear in overseas markets.

 

T-Mobile and Sprint, the third- and fourth-largest US wireless carriers, said that Team Telecom, in a filing with the Federal Communications Commission (FCC), indicated it had no objections to the merger after reviewing “potential national security, law enforcement, and public safety issues.”

“We are pleased to achieve both of these important milestones in the journey to build the New T-Mobile,” T-Mobile CEO John Legere said in a statement. The company has previously said it expects the deal to close in the first half of 2019.

“These approvals assure the strong partnership both companies have with the US government will continue with the New T-Mobile. We look forward to continuing our discussions with the remaining regulatory agencies reviewing our transaction.”

The US wireless carriers still need to win antitrust approval from the Justice Department and the FCC.

The US government and its allies have stepped up pressure on Huawei amid concerns the company is effectively controlled by the Chinese state and its network equipment may contain “back doors” that enable cyber espionage, something Huawei denies.

Several telecom operators in Europe and Australia have said they will exclude the Chinese firm from their fifth-generation (5G) mobile networks.

The pressure on Huawei has heightened tensions between the United States and China over trade. Earlier this month, Meng Wanzhou, Huawei’s chief financial officer and daughter of its billionaire founder, was arrested in Canada at the request of the United States, which has asked for her extradition.

US prosecutors have accused her of misleading multinational banks about Huawei’s control of a company operating in Iran. China has asked for her release.

FASTFACTS

$26 billion — value of the merger between T-Mobile US Inc. and Sprint Corp. which has been approved by Team Telecom.


Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

Updated 8 min 31 sec ago
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Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

  • Financial Sector Conference is designed to showcase Saudi Arabia’s finance industry to a world audience
  • The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC)

RIYADH: Saudi Arabia’s real estate finance sector — crucial to the ambition of a home-owning economy under the Vision 2030 strategy — is maturing rapidly, a high-profile event in Riyadh heard on Wednesday.
“We’re on the right track,” housing minister Majid Al-Hogail told attendees on the first day of the Financial Sector Conference, designed to showcase Saudi Arabia’s finance industry to a world audience.
His comments came as financial institutions in the Kingdom announced a raft of measures to encourage more home ownership.
The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC) — owned by the Public Investment Fund — to issue up to SR3.75 billion ($1 billion) worth of sukuk, or Islamic bonds, this year to finance home ownership plans.
Fabrice Susini, chief executive of the company, said SRC had spent SR1.2 billion buying mortgages from local mortgage finance companies and adding liquidity to these firms. SRC is often compared to US home finance group Fannie Mae.
Reform of the financial infrastructure of the property market is regarded as crucial to Saudi Arabia’s Vision 2030 reform plans, to ensure an ownership rate of 70 percent in the privately owned housing market by 2030.
In a panel entitled “Mortgages: Bolstering Industry Appetite,” Al-Hogail spoke of the unique position Saudi Arabia has in the housing market, highlighting the relevance of a database established by the Ministry of Housing to give a better and deeper understanding of the market. The diverse nature of the market presents its own challenges, he said.
“Every city has its own different set of challenges and we can’t generalize. With the establishment of the database, it provides the ministry with a better future outlook through more detailed information, obtained through various means — whether it were through the Electric Company, through the Ministry of Municipal and Rural Affairs, or through the General Authority for Statistics and their surveys.”
“Over 16 government agencies support the housing sector to achieve Saudi Vision objectives, to increase property ownership among Saudis to 70 percent by 2030,” he said.
An official report for the first quarter of 2019 revealed that the finance market reached SR5.6 billion last March. Some 12,800 citizens received loans, and 85 percent were subsidised.
Saudi Arabia last year announced plans to boost the size of the mortgage market to SR502 billion by 2020 as part of a comprehensive plan to provide housing finance to its citizens, facilitating a balanced and sustainable housing environment through the establishment and development programs.
In other deals, Bidaya Home Finance announced three initiatives to enhance the Saudi market. Its first initiative involved the sale of Bidaya’s mortgage portfolio to SRC, valued at SR500 million over a period of six months. SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview. “Our strategy is clearly to tap the market twice this year,” he said.
“We are really looking at probably issuing something between SR2 to 4 billion that we may be issuing in two tranches.”
He said SRC was looking at sukuk in the 10- to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said. He added that the company was assessing whether it could also issue bonds in currencies other than the Saudi riyal.
In March, SRC completed a SR750 million sukuk issue with multiple tenors, under a program that allows it to issue up to SR11 billion of local currency denominated Islamic bonds.