December 15, 2004

Sprint to Buy Nextel for $35.17 Billion

It's finally official as Sprint agreed to buy Nextel for $35.17 billion. The combined company of the number 3 and 5 wireless carriers will have 40 million customers. Sprint plans to spin-off the local phone business to focus on the wireless. The merged name will be Sprint Nextel.

Cost synergies are expected to be $12 billion. Each Nextel share will get 1.28 shares of Sprint Nextel and 50c in cash. The Sprint CEO, Gary Forsee, will become the CEO of Sprint Nextel. And the Nextel CEO, Timothy Donahue, will become the chairman.

The deal is subject to regulatory approval, but analysts widely expect no problems. The target date for close is the second half of 2005. Sprint Nextel plans to switch Nextel's network to CDMA in the coming years.