OVERLAND PARK, Kan., Dec. 15 (UPI) -- Sprint and Nextel Communications agreed Wednesday to a merger that will create the third largest U.S. wireless company.
The stock-cash deal has an estimated value of more than $35 billion, depending on the value of Sprint stock when the deal closes in the second half 2005. Nextel shareholders will receive 1.3 Sprint shares and about 50 cents in cash for each Nextel share.
Significant layoffs are expected.
Upon completion the merged entity will have more than 35 million wireless subscribers, while Verizon Wireless has 42.1 million customers and Cingular Wireless, the market leader, has 47 million subscribers.
The companies, which have yet to announce a formal name for the combination, will spinoff local phone operations, largely seen as cash businesses with little prospect for growth.
Each company's boards will hold six seats on the new entity's board, and Sprint chief executive Gary Forsee will take the same job with the merged company. Nextel chief executive Timothy Donahue become chairman of the new company.
"Executive" offices will be in Reston, Va., while operational headquarters will be in Overland Park, Kan., a suburb of Kansas City. The new company will be listed on the New York Stock Exchange.
