US mobile telephone network operators Sprint Corporation and Nextel Communications are to merge in a $35 billion deal. The combined company, Sprint Nextel, will be the US's third largest mobile phone network. Nextel CFO Paul Saleh will become CFO of the merged company.
Sprint and Nextel shareholders will each own approximately 50% of the new company. Under the terms of agreement, however, Nextel shareholders will be compensated with 1.28 shares for each existing share and a cash payment of 50 cents per share.
It is expected that the combined company will deliver operating cost and capital investment synergies of more than $12 billion.
Sprint CEO Gary Forsee says: ?This merger positions Sprint Nextel for greater success than either company could have achieved alone. The combination of Sprint and Nextel builds strength on strength. It will be a dynamic next-generation communications company.?
Sprint is being advised by Lehman Brothers and Citigroup, Nextel by Goldman Sachs, Lazard Freres and JP Morgan Securities. The deal is expected to close in the second half of 2005.