Shareholders Approve Sprint-Nextel Merger
Thursday, July 14, 2005
Shareholders of Nextel and Sprint approved a $35 billion merger yesterday in separate meetings, setting the transaction on course for regulatory approval as soon as the end of the month.
Meeting in Reston, 71.3 percent of Nextel Communications Inc. shareholders endorsed the deal. Ninety-eight percent of Sprint Corp. shareholders approved it at their meeting in Overland Park, Kan.
"Most especially we can't wait to compete against the large . . . telecom companies," Timothy M. Donahue, chief executive of Nextel, said to the gathering of shareholders. Donahue will be chairman of the combined Sprint-Nextel, which will primarily use the Sprint name but will continue to market under both brands.
In a conference call, Sprint chief executive Gary D. Forsee said the company hasn't figured out how many layoffs will result from the merger. "Employees shouldn't expect to see a headline that there are thousands of jobs cut," said Forsee, who will be chief executive of the combined company.
The new company will continue to grow and will eventually build a super-fast wireless network that will require a robust workforce, Forsee said. Sprint and Nextel currently employ a total of 60,000 people, with combined annual revenue of $41 billion.
Tuesday night, a Sprint affiliate called UbiquiTel filed a lawsuit against Sprint alleging that the merged company would violate its business agreement to operate exclusively in parts of nine states. Sprint and Nextel have faced similar challenges, and Sprint said it would defend itself against UbiquiTel's charges. Executives at both companies said legal cases would not delay the merger.
Federal Communications Commission members are considering a staff recommendation to approve the deal. The Justice Department also must complete an antitrust review.