KANSAS CITY, Mo. (AP) -- Shareholders of Sprint Corp. and Nextel Communications Inc. are poised to approve the companies' union, creating the nation's third-largest wireless phone company with more than 40 million subscribers.þþThe new company will represent a solid competitor to industry leaders Cingular Wireless and Verizon Wireless. Shareholders were voting Wednesday in separate meetings to approve the $35 billion acquisition of Reston, Va.-based Nextel by Overland Park, Kan.-based Sprint. Approval from both groups was expected.þþThe effect of the merger on consumers is unclear, although the extra competition will likely continue the drive in wireless toward lower prices, faster Internet speeds and expanded add-ons for cell phones, ranging from ringtones to games to video programming.þþWhile it still requires regulatory approval, the combination of consumer-savvy Sprint and business-friendly Nextel will have more than $40 billion in annual revenue. The deal is expected to close in the third quarter.þþAt the FCC, a source with firsthand knowledge of the deliberations told The Associated Press Tuesday that staff members have recommended approval of the merger and have forwarded their findings to the agency's four commissioners.þþThe source, speaking on condition of anonymity because the recommendation has not been made public, said staff members looking into the deal have forwarded their findings to the agency's four commissioners. No timetable was given for final approval.þþOpposition to the merger has been light, restricted to some consumer advocates worried over the continued consolidation within the telecommunications industry and certain affiliates of the two companies, possibly angling for better terms after the merger.þþSprint on Monday cleared one of those obstacles by agreeing to buy Lake Charles, La.-based U.S. Unwired Inc., which had filed in federal court for an injunction of the merger, saying it would allow Sprint to violate an exclusivity agreement. Under the deal, Sprint will pay about $1 billion in cash and assume $266 million of the company's debt and both sides will ask the federal judge to set aside the injunction request.þþNextel Partners Inc., which sells Nextel services in 31 states, has also filed suit, seeking to prevent the unified company from making Sprint the lead brand. The Kirkland, Wash.-based affiliate also is arguing that the merger will require the unified company to buy the two-thirds of Nextel Partners that Nextel doesn't own.þþAs part of the ''merger of equals,'' Nextel shareholders will receive 1.3 shares of the new Sprint Nextel Corp. for each of their shares, as well as some cash. The companies said they are structuring the merger to prevent tax liability, so officials don't know yet how much Nextel shareholders will receive. But they said the amount of money to be paid is capped at $2.8 billion.þþFollowing the merger, the unified company plans to spin-off Sprint's local telephone service as its own business early next year. Once separate, the as-yet unnamed unit will be the fifth largest local telecom in the country with 7.6 million access lines in 18 states.þþThe new company will have its corporate headquarters in Reston. An operations headquarters will remain at Sprint's 200-acre campus in Overland Park. The company is expected to have around 60,000 employees, which is about equal to the current Sprint and Nextel work forces, although officials have said there will be layoffs.þþ
Source: NY Times
