July 9, 2003 — (WEB HOST INDUSTRY REVIEW) — According to reports, Singapore Technologies Telemedia?s (STT) (st.com.sg) plan to purchase a majority stake in Global Crossing (globalcrossing.com) ran into a major roadblock late Tuesday as U.S. officials revealed the Pentagon and Department of Homeland Security had national security concerns about the deal.
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The STT deal has raised concerns about potential foreign ownership of key telecommunications assets. Singapore Technologies is a unit of Temasek Holdings, the investment arm of the Singapore government.
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The U.S. Committee on Foreign Investment must approve all deals involving foreign entities.
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The panel must decide within 30 days of the filing whether to allow the transaction to go forward or extend its investigation for another 45 days. Following the review process, U.S. President George W. Bush would have 15 days to decide whether to allow the deal.
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Global Crossing filed for bankruptcy in January 2002 with $12.4 billion in debt and $22.4 billion in assets.
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STT has a standing offer of $250 million to purchase a 61.5 percent stake in the company and several telco carriers have expressed interest as well.
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The most aggressive bid has come from XO Communications (xo.com), headed by financier Carl Icahn. XO has upped its offer four times in the last month and has played up the security implications of foreign ownership. “I believe, along with many in Congress, that foreign governments should not own and control a large U.S. telecom company, for security reasons,” Icahn told Reuters.
