Sprint, Nextel sign merger agreement

Dec 15 2004 - 11:23 AM ET | Nextel, Sprint Nextel
As expected, Sprint and Nextel have come to a merger agreement. The ink is barely dry, but here's what is known: * Each Nextel common share will be converted into new company shares and a small per share amount of cash, with a total value equal to 1.3 shares of Sprint Nextel common stock. The exact stock/cash allocation will be determined at closing of the merger in order to facilitate the spin-off of the wireline business on a tax-free basis. If the merger completed today each Nextel share would see a $.50 payment. * The two companies had $40 billion in revenue for the previous four quarters ending September 30. * The merger is expected to save the companies $12 billion. * The Sprint Nextel Board will consist of 12 directors, six from each company, including two co-lead independent directors, one from Sprint and one from Nextel. * Nextelís push to talk service will be converted to CDMA, though a time frame was not announced. The merger is expected to close in the second half of 2005 pending approval from both shareholders and regulatory comissions. Executives do not believe regulatory approval will be a difficult sell (unlike a Verizon takeover of Sprint).