The Federal Government has approved the $14 billion Singapore Telecommunications (SingTel) takeover of Cable & Wireless Optus.
The approval is subject to security conditions due to Optus' half-share with the Defence Department in a $500 million communications satellite, which is due to be launched next year.
SingTel, which is 78 per cent owned by the Singapore Government, has been attacked over its potential control of the satellite, which will be used equally for military and civilian traffic.
The Federal Government said that approval of the deal was subject to SingTel proving it did not need an export licence from the US Government for sensitive technology that allows the satellite to send, receive and encrypt communications.
The approval is also conditional on SingTel and Optus sticking to the deeds of agreement with the Government and certain defence security issues. The Government said ASIO and other security organisations had cleared the bid.
SingTel said in a statement it expects to "shortly receive confirmation from the US State Department in relation to the export licences" and "also expects to shortly receive approvals under the FSSA (Financial Sector Shareholdings Act) and IATA (Insurance Acquisitions and Takeovers Act)".
SingTel said that once these necessary approvals are received, it would review takeover conditions before declaring its offer for Optus unconditional, except for the 50 per cent minimum acceptance condition.
Optus shareholders who accept SingTel's offer on or before the day on which it becomes wholly unconditional will be paid within seven days of the unconditional date.
SingTel said if the unconditional date occurs on or before August 30, Optus shareholders who accept straight away and who elect to be paid by the share alternative or the share and cash alternative, will be entitled to receive the SingTel dividend.
Those accepting after the unconditional date will not be entitled to receive the dividend.