Sprint, Nextel Reach Tentative Deal

Is this good or bad for employment in Kansas City, hard to tell.

Content from the Wall Street Journal

By DENNIS K. BERMAN and JESSE DRUCKER
Staff Reporters of THE WALL STREET JOURNAL
December 10, 2004 4:09 p.m.

Sprint Corp. and Nextel Communications Inc. have tentatively agreed to economic terms of a merger of equals that would create a third giant cellular carrier with nearly 39 million subscribers, said a person familiar with the matter.

The talks, characterized as advanced negotiations, could still fall apart, but if things stay on track, a deal could be announced soon. Those terms will pay Nextel shareholders the equivalent of 1.3 shares of Sprint stock, with a small cash element in order to ensure that current Sprint shareholders have more than 50% of the combined company.

That is important, this person says, because the combined company, post-closing, will be spinning off Sprint's local-phone carrier. This new spin-off will maintain its headquarters in Overland Park, Kan.

Current Sprint Chief Executive Gary Forsee will continue to serve in that role at the new, largely wireless company, which will be called Sprint-Nextel. Nextel Chief Executive Timothy Donahue would serve as executive chairman of the new company. The company would have a 50-50 split among board members.

The company will have a corporate headquarters in Reston, Va., where Nextel is currently based, with an operating headquarters in Overland Park, Kan., where Sprint is currently based.




Timothy Burger