TOKYO AND WASHINGTON (08/15/2000) - A U.S. government committee has given the green light to NTT Communications Corp.'s planned acquisition of Internet backbone and Web hosting company Verio Inc., according to sources familiar with the issue who declined to be named.
Once U.S. President Bill Clinton receives the recommendation of the Committee on Foreign Investment (CFIUS) in the U.S., he will have 15 days in which to approve or deny the deal.
The acquisition, valued at US$5.5 billion when it was announced in May, has been delayed several times by the U.S. government's probe into possible national security implications of the deal. Verio, which operates a major part of the U.S. Internet backbone, will become a wholly owned subsidiary of NTT Communications, which is a wholly owned unit of Nippon Telegraph and Telephone Corp. (NTT).
CFIUS is an interagency committee chaired by the Secretary of Treasury that seeks to serve U.S. investment policy through reviews of acquisitions that protect national security, while attempting to maintain U.S. policy on open and fair foreign investment.
A report Monday in the Nihon Keizai Shimbun newspaper said the committee approved the deal after NTT gave assurances it would cooperate with law enforcement agencies on wiretapping. [See "Report: U.S. to Approve NTT/Verio Deal Monday," Aug. 14.]The U.S. Federal Bureau of Investigation (FBI) raised concerns over the acquisition because it feared its ability to conduct wiretaps on Verio customers would be impeded if the company were taken over by a company in which the Japanese government maintained a majority stake. The Japanese government owns 53 percent of NTT Corp., Japan's largest telecommunications carrier.
An FBI spokesman on Tuesday referred calls to the U.S. Department of Treasury.
A Treasury Department spokesman declined to comment, saying he is prohibited from even confirming whether the CFIUS is investigating. The U.S. Department of Justice and Verio also did not return calls.
Verio, however, issued a statement saying it has extended the debt tender offers for outstanding notes until August 23. The move comes after NTT Communications said on Friday it would extend the expiration date of its tender offer for all the outstanding shares in Verio until August 21, Verio said.
NTT Communications, in Tokyo, can be reached via the Web at http://www.ntt.com/index-e.html. Verio, in Englewood, Colorado, is at +1-303-645-1900 or at http://www.verio.com/.