1. #1
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    Default Nextel- Sprint to merge.

    PHILADELPHIA/NEW YORK (Reuters) - Sprint Corp. is close to an agreement to buy Nextel Communications Inc. for about $35 billion in a mostly stock deal that would combine the No. 3 and No. 5 U.S. wireless telephone companies, sources familiar with the situation said on Friday.

    A Sprint-Nextel merger would face some expensive technology hurdles as their networks use incompatible wireless systems, analysts said. Still, the companies would benefit by gaining more wireless spectrum to transmit calls and a more diverse customer base.

    Nextel caters to high-paying corporate customers with its walkie-talkie-type telephones, while Sprint targets mass-market customers such as families and teenagers.

    "We believe that a potential combination of Sprint and Nextel would make sense on a number of measures, including spectrum position, network technology upgrade path and the complementary nature of the two customer bases," said Merrill Lynch analyst James Moynihan.

    The companies, which have held talks over the past year, renewed negotiations in recent days for a merger that would create a wireless giant with about 39 million customers to rival industry leaders Cingular Wireless and Verizon Wireless.

    The companies aim to forge an agreement by the middle of next week, although negotiations could still break down, sources said.

    Sprint Chairman and Chief Executive Gary Forsee would be chief executive of the combined company, while Nextel Chief Executive Tim Donahue would be executive chairman.

    The board of directors would be evenly split between the two companies, the sources said.

    Under the terms being considered, Sprint (NYSE:FON - news) aims to pay 1.3 shares of Sprint stock for each share of Nextel (Nasdaq:NXTL - news), the sources said.

    Based on current stock prices, that would value Nextel at about $35 billion, or $31.38 a share. That price includes a small component that gives Sprint slightly larger ownership in the company for tax purposes, sources said.

    As part of a deal, Sprint would spin off its 18-state local telephone business through a tax-free dividend to shareholders, sources said. The local business would operate as a new publicly traded company.

    Sprint's long-distance telephone and data services would remain part of the company and merge with Nextel, sources said. That would allow the companies to sell packages of long-distance, wireless and Internet services to customers.

    The combined company may keep both the Nextel and Sprint brand names, the sources said.

    MERGER TO RAISE PRICES?

    A merger would continue the long-awaited consolidation in the fiercely competitive U.S. wireless industry.

    Market leader Cingular Wireless, a joint venture of SBC Communications Inc. (NYSE:SBC - news) and BellSouth Corp. (NYSE:BLS - news), kicked off the year with a bidding war for AT&T Wireless Services Inc., which it bought for $41 billion.

    But there are still five large national mobile phone companies -- Deutsche Telekom AG's (DTEGn.DE) T-Mobile USA is No. 4 -- as well as several regional players.

    "We believe consolidation in wireless may ultimately increase levels of competition in the sector, which is good for consumers, regulators and providing scale to a third competitor," said Michael Bowen, an analyst with Friedman, Billings, Ramsey & Co.

    But consumer activists say shrinking the number of national wireless service companies can only hurt consumers.

    "We've seen in recent years that consumers are getting better and better deals," said Susanna Montezemolo, a policy analyst for Consumers Union, a nonprofit consumer advocacy group.

    If regulators approve a Sprint-Nextel merger, "those great deals that consumers have come to expect and the ever-better packages will be a thing of the past," Montezemolo said.

    The New York Times reported that Verizon Wireless, a joint venture of Verizon Communications Inc. (NYSE:VZ - news) and Britain's Vodafone Group Plc (VOD.L), might be interested in making a bid for Sprint.

    Yet sources familiar with the situation told Reuters such a possibility was slim.

    Verizon Wireless had previously looked at the assets of both Sprint and Nextel and decided not to make an offer for either, they said.

    Verizon Wireless declined to comment.

    Shares of Nextel closed at $29.76, down 5 cents, on Nasdaq. Shares of Sprint, the most actively traded stock on the New York Stock Exchange (news - web sites), shed 14 cents to close at $24.14.

    (Additional reporting by Sinead Carew and Dan Wilchins in New York, and Justin Hyde in Washington)
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    Oh great. Nextel's next step in their quest for world domination. With any luck, the company will be obliterated by an errant asteroid before this merger takes place. I pitty Sprint, at least they had some shred of eithics.
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    nmfire, I believe it is Sprint that would be buying Nextel, not the other way around.

    I read a news article somewhere that eventually Nextel customers would be turning in their phones for Sprint ones. Bad news for Motorola.
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    I would hope that Sprint would stick with the Nextel technology for the two-way. I don't know how well Sprint's two-way feature is, but I know Alltell's sucks compared to Nextel.

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    Originally posted by firenresq77
    I don't know how well Sprint's two-way feature is, but I know Alltell's sucks compared to Nextel.
    I'll second that........

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    I know it is Sprint buying CrapTel, but it will still be like poluting Sprint with NexTel big-wigs... AND it will make NexTel and it's mornic management part of an even bigger company.

    Sprint has PTT service. It is definately comparable to NexTel as far as speed and the audio quality is about 100x better, not that it would take much.
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    Originally posted by firenresq77
    I would hope that Sprint would stick with the Nextel technology for the two-way. I don't know how well Sprint's two-way feature is, but I know Alltell's sucks compared to Nextel.
    I don't think the Motorola/Nextel iDEN PTT will work with regular CDMA cell phones. If it did, they wouldn't have their own system that doesn't work with any of the other cell companies.

    I have found that Sprint's PTT works just as well as Nextel's and I never have to worry about my phone not having service somewhere.

    There's some more interesting articles posted on Radio Reference.com
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    Talking

    Now this is going to confuse the H#LL out of the NASCAR announcers. They were just getting used to Nextel cup, and now it will be having to remember Sprint cup!!!

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    If the announcers of the left turn circuit can change from a cigarette company to a phone company, then changing from phone comany to phone company shouldn't stress them too much!

    But ya never know!
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    What concerns me more than anything about this BS is I wouldn't put it past NexTel to use this as a loop hole to not have to pay for the 800Mhz rebanding that they agreed to with the FCC. It will all get dumped back on us and they will give another couple hundred million to the race cars.
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    There is a lot of speculation out there about buyouts, mergers, selloffs, and other moves in the Wireless Industry. Personal opinion, I don't think there are enough idiots among Nextel's stockholders that this thing could get by. The stockholders of any corporation must approve any type of merger or acquisition, and the numbers don't make sense for Nextel. Before anyone asks, I have Nextel equipment, as do almost all of our members, and we use it a lot. Only problem, which is slowly improving, is some dead spots. I expect to continue as a Nextel customer for a long time.
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    My only concern is that the "Sprint-Nextel Cup" sounds stupid.
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    Yeah, but imagine being able to trademark the phrase, "Sprint to the Finish..."
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    Talking Been That, Done There.................

    Originally posted by Dalmatian90
    Yeah, but imagine being able to trademark the phrase, "Sprint to the Finish..."
    I just did. Today.
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    Default Oh yeah?

    Originally posted by firenresq77
    I would hope that Sprint would stick with the Nextel technology for the two-way.
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    So two companies with crappy services are merging wow thats a great idea NOT! I have a nextel, and everyone at my school that has like cingular can get service in the whole school i only get service in 2 rooms but its really not that bad! Except their phones are like friggen bricks(size wise)maybe sprint will add some new phones to nextels selection (that are cheaper)
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    Not even going to ask WHY you need cell service while IN SCHOOL.
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    An Ex-Lax-Charmin merger would make more sense to me...then if they bought out Sprint, NASCAR could have the Ex-Lax-Charmin, "Sprint to the Finish"
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    Default It's Official-like

    Sprint, Nextel agree to merge in $35 billion deal



    NEW YORK (AP) -- Telecommunications giants Sprint Corp. and Nextel Communications Inc. have agreed to merge in $35 billion deal that would create the nation's third largest wireless telephone service provider.

    The widely rumored deal announced Wednesday would create a company that would be known as Sprint Nextel that would have about $40 billion in combined revenue in the latest year and would serve more than 35 million wireless subscribers, trailing only the industry leaders Cingular Wireless and Verizon Wireless.

    Sprint would get access to Nextel's large base of business customers as a result of the deal while Nextel would get an opportunity to expand faster as it was approaching a decision on a big investment in upgrading its network infrastructure.

    The deal was structured as merger of equals that values each company at about $35 billion.

    After completion of the deal, the companies said that Sprint's local telecommunications business would be spun off to the combined company's shareholders. The local telecom business accounts for about $6 billion of the combined company's estimated revenues.


    Copyright 2004 The Associated Press. All rights reserved.
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