It's official. Sprint (QUOTE NYSE:FON) and Nextel Communications (QUOTE NASDAQ:NXTL) today announced that they have completed their merger transaction, forming Sprint Nextel Corporation.
Sprint Nextel common stock will begin trading on the New York Stock Exchange Monday, Aug. 15, under the symbol "S."
With more than 44 million wireless subscribers, Sprint Nextel serves a mix of consumer, business and government customers. The company claims it produces the highest average revenue per user in the industry. On a "pro forma" basis, Sprint Nextel reported revenues of $40.8 billion for the year ending December 31, 2004.
The two telecom firms agreed to merge last December. Sprint Nextel, along with its affiliates and partners, operates networks that cover approximately 268 million people. It has approximately 80,000 employees with its corporate headquarters in Reston, Va., and its operational headquarters in Overland Park, Kan.
"I am jazzed about this combination because the combined company's assets and capabilities are so closely aligned with the high-growth areas of our industry," said Timothy Donahue in a conference call with analysts back when the merger was announced. Donahue, the former CEO of Nextel, is now chairman of the merged company.
"This new powerhouse company has the spectrum, the infrastructure, the distribution and the superb and differentiated product portfolio that will drive our continued success."
Gary Forsee, Sprint's chairman and CEO, takes the helm of Sprint Nextel as president and CEO.
Each outstanding share of Nextel common stock will be converted into a combination of Sprint Nextel common stock and cash with a value equal to 1.3 shares of Sprint Nextel common stock.
Sprint Nextel said in a statement that it has begun the process of separating the operations of Sprint's local telecommunications business, including consumer, business and wholesale operations, and will seek regulatory approvals to spin off the local telecommunications business to Sprint Nextel shareholders in a tax-free transaction, which is expected to be completed in 2006.
Co-location work will continue in 2006, and the merged company will begin work on consolidating network operations.
Sprint Nextel officials will also start planning on moving Nextel's iDEN network over to CDMA (define) while they start marketing Motorola (Quote) dual-mode phones that use Nextel's push-to-talk service on Sprint CDMA-based phones.
In 2008, Sprint Nextel will start developing voice over IP (define) and push-to-talk services on Sprint's next-generation wireless platform, CDMA2000 1x EV-DO. Sprint Nextel officials expect 14,000 Nextel cell sites, about half the current number, will host CDMA equipment by 2008.
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