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VSNL, Tyco get OK on deal

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CIOL Bureau
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WASHINGTON: Videsh Sanchar Nigam Ltd. has received conditional approval from the Committee on Foreign Investment in the United States to acquire a Tyco International Ltd. fiber-optic cable unit, the companies said on Tuesday.



VSNL agreed to acquire Tyco Global Network for $130 million last November, which would give India's leading telephone and Internet service provider control of a 60,000 km network that spans Asia, Europe and North America.



On Monday CFIUS "issued formal notice to VSNL that its review of the situation uncovered no significant issues of national security with regard to this transaction," VSNL said.



The panel, which examines whether deals involving foreign companies put U.S. national or economic security at risk, cleared the deal after the companies signed a security agreement with the Justice Department, Department of Homeland Security and Federal Bureau of Investigation.



That agreement requires VSNL's U.S. units to allow law enforcement agencies to conduct surveillance of domestic calls and requires them to take steps to prevent unauthorized access or use of the network.



VSNL will also have to designate a security officer to implement the agreement, maintain certain data within the United States and limit disclosure of U.S. data to any foreign government without approval from U.S. security agencies or a U.S. court.



Three Republican U.S. senators had urged CFIUS to extend its review of the deal, arguing that Tyco's network was a strategic asset and VSNL had acted in a "fashion demonstrably hostile to U.S. military and commercial interests."



The lawmakers, Sens. Jon Kyl of Arizona, Ted Stevens of Alaska and Jeff Sessions of Alabama, had wanted CFIUS to embark on a 45-day intensive probe of the deal, beyond the usual 30-day review.



Tyco shares closed up 57 cents, or 1.7 percent, to $34.44 on the New York Stock Exchange.

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