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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Nextel deal advances


Shareholders gave overwhelming support to Sprint's $35 billion acquisition of Nextel on Wednesday. If approved by the government, the deal would create a company with 40 million wireless customers. 
 (File/Associated Press / The Spokesman-Review)
Associated Press

OVERLAND PARK, Kan. – Shareholders gave overwhelming support to Sprint Corp.’s $35 billion acquisition of Nextel Communications Inc. on Wednesday, in another step toward creating the nation’s No. 3 wireless company.

Nextel, which met in Reston, Va., said the deal was approved by 99.8 percent of the shares that voted. At least 96 percent of Sprint shares also voted to approved the merger. Sprint met in Overland Park, Kan.

The combination, which still requires approval from the Federal Communications Commission and the Justice Department, would create a company with more than 40 million wireless customers and $40 billion in annual revenue.

The combined company is expected to be a solid competitor to industry leaders Cingular Wireless and Verizon Wireless. While the deal’s effects on consumers are unclear, it likely will continue the drive in wirelesstoward lower prices, faster Internet speeds and expanded add-ons for cell phones, ranging from ringtones to games to video programming.

“We’re about to jump out of our skins to get into the market and compete,” said Sprint chairman and CEO Gary Forsee, who will become chief executive of the combined company.

The deal is expected to close in the third quarter.

FCC staff members reportedly have recommended approval of the merger and have forwarded their findings to the agency’s four commissioners. No timetable has been given for final approval.

Opposition to the deal 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.

Sprint 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.

On Wednesday, Sprint and Nextel said another Sprint affiliate, UbiquiTel Inc., had filed suit in Delaware Chancery Court, claiming the merger would violate its exclusivity agreement with Sprint. The Conshohocken, Pa.-based company, with about 413,000 subscribers, is not asking to stop the deal.

Nextel Partners Inc., which sells Nextel services in 31 states, also has filed suit seeking to clarify branding issues, as the companies have said Sprint will be the lead brand. The Kirkland, Wash.-based affiliate also plans to ask its shareholders to vote in favor of requiring the unified company to buy the two-thirds of Nextel Partners that Nextel doesn’t own.

Forsee said Wednesday that Sprint and Nextel are continuing to talk with the affiliates on how they will work with the merged company, but wouldn’t say if that would require buying some or all of those affiliates.