Sprint Corp. (FON) and Nextel Communications Inc. (NXTL) completed their $35 billion merger Friday to form Sprint Nextel Corp. The merged company will begin trading on the New York Stock Exchange Monday under the symbol “S,” previously held by Sears Roebuck & Co. First announced in December, the merger creates a cellular giant with more than 40 million subscribers.
Sprint Nextel has begun the process of separating the operations of Sprint’s local telecommunications business, including consumer, business and wholesale operations. The company 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.
The local telecommunications business will have its own management team and board of directors, consisting of an equal number of designees from Sprint and Nextel. The local telecommunications business has about 7.5 million local access lines in 18 states and as of June 30 had revenue of more than $6 billion during the prior 12 months.
As previously announced, Tim Donahue, Nextel’s president and chief executive, will become chairman of the new company. Gary D. Forsee, Sprint’s chairman and chief executive, will be Sprint Nextel’s chief executive and president. Existing customers will continue with their current services and plans the companies said.
Sprint shares closed Friday at $26.15, down 47 cents, or 1.8%. Nextel shares closed at $33.32, down $1.17, or 3.4%.