Sprint and Nextel announced yesterday a merger of equals between the two wireless telecommunications companies. Together, Sprint Nextel will be a larger, stronger company with more resources, which will be better positioned to transform our vision of a wireless future into a reality.

There are obvious questions as to the impact this could have on Nextel's NASCAR sponsorship. Nextel stands by its belief that the NASCAR Nextel Cup Series is one of the best brand and sponsorship investments Nextel has ever made. Nextel has invested significant resources throughout 2004 to find ways to enhance the sport and provide a more dynamic fan experience. Nextel expects no rebranding of logos or signage in 2005 and will continue to honor that commitment as Series sponsor and the programs initiated in 2004 will only continue to evolve.

We expect our relationship with NASCAR to continue and to prosper and the new Sprint Nextel team is enthusiastic about the NASCAR relationship. Both groups are focused on building on the success of the Nextel Cup's first year.

The merger is expected to close in the second half of 2005 and is subject to approval by the shareholders of both companies, approval by various federal and state regulatory agencies, possible foreign governmental approvals and other customary closing conditions.

Forward-looking statements
A number of the matters discussed in this press release that are not historical or current facts deal with potential future circumstances and developments, in particular, information regarding the new company, including expected synergies resulting from the merger of Sprint and Nextel, combined operating and financial data, future technology plans and whether and when the transactions contemplated by the merger agreement will be consummated. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the failure to realize capital and operating expense synergies; the result of the review of the proposed merger by various regulatory agencies, and any conditions imposed on the new company in connection with consummation of the merger; approval of the merger by the stockholders of Sprint and Nextel and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement; and the risks that are described from time to time in Sprint's and Nextel's reports filed with the SEC, including each company's annual report on Form 10-K for the year ended December 31, 2003 and quarterly report on Form 10-Q for the quarter ended September 30, 2004, as such reports may have been amended. This press release speaks only as of its date, and Nextel disclaims any duty to update the information herein.

Additional information and where to find it
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. SPRINT AND NEXTEL SHAREHOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/ PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. The final joint proxy statement/prospectus will be mailed to shareholders of Sprint and shareholders of Nextel. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, www.sec.gov, from Sprint Investor Relations at Sprint Corporation - Investor Relations, 6200 Sprint Parkway, Overland Park, Kan. 66251 or call 800-259-3755, Option 1 or from Nextel Investor Relations at Nextel Investor Relations 2001 Edmund Halley Drive, Reston, Va. 20191 or call 703-433-4300.

Participants in solicitation
Sprint, Nextel and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Sprint's participants is set forth in the proxy statement, dated March 16, 2004, for Sprint's 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Information concerning Nextel's participants is set forth in the proxy statement, dated April 2, 2004, for Nextel's 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of participants of Sprint and Nextel in the solicitation of proxies in respect of the merger will be included in the registration statement and joint proxy statement/prospectus to be filed with the SEC.

NASCAR.com

redriderbob

 

Nextel president and CEO Tim Donohue speaks at the 2004 Nextel Cup Awards Ceremony!

NEW YORK (AP) -- Telecommunications giant Sprint Corp. is acquiring Virginia-based Nextel Communications Inc. in a $35 billion deal that would create the nation's third largest wireless telephone service provider.

Sprint Nextel will have its executive headquarters in Reston, Va., where Nextel is now based, and its operational headquarters in Overland Park, Kan., where Sprint has its headquarters.

The widely rumored transaction, announced Wednesday, would create a company called Sprint Nextel with about $40 billion in combined yearly revenue and more than 35 million wireless subscribers, trailing only Cingular Wireless and Verizon Wireless.

Sprint would get access to Nextel's 15.3 million subscribers, many of whom are business customers, and Nextel would avoid a costly upgrade of its own network. The companies estimated the merger would save them $12 billion in operating costs and network upgrades.

The combination comes as the cost of wireless calls continue to drop and the industry begins to look like the long-distance business looked five years ago: Three big competitors constantly undercutting each other's prices.

After completion of the deal, which the companies described as a merger of equals, Sprint's local telecommunications business would be spun off to the combined firm's shareholders.The local telecom business accounted for about $6 billion of their combined revenues.

The company expects the local business to have roughly 22,000 employees and the combined wireless company to have about 55,000 employees.

While these numbers match existing employee totals for both companies, executives said Wednesday jobs would be cut. "At the end of the day, it will be about rationalizing and downsizing," Gary D. Forsee, Sprint's chairman and chief executive said Wednesday.

In early trading, Sprint shares fell 18 cents at $24.92 on the New York Stock Exchange, while Nextel shares fell 10 cents to $29.89 on the Nasdaq Stock Market.

Forsee will become president and CEO of Sprint Nextel, and Timothy M. Donahue, currently president and CEO of Nextel, will become chairman of the new company.

The new company's board would consist of 12 members with six from each company.

"This merger positions Sprint Nextel for greater success than either company could have achieved alone," Forsee said in a statement.

Sprint currently ranks as the nation's third biggest wireless company as well as the third largest in long-distance service. Nextel ranks fifth in U.S. wireless service.

Nextel agreed last month to move its network to a more expensive band of broadcast spectrum because of fears of interference between its phones and emergency response radios.

Now, according to a press release from the companies, Sprint's next-generation technology will be used for the combined network.

After the takeover, the three largest wireless companies will carry about 75 percent of traffic, according to telecom analyst Jeff Kagan.

At the top is Cingular Wireless, a joint venture between BellSouth Corp. and SBC Communications Inc. that recently completed the $41 billion acquisition of AT&T Wireless. No. 2 Verizon Wireless is a joint venture owned by Verizon Communications Inc. and Vodafone Group PLC, the world's largest mobile-phone operator.

Under terms of the deal, Sprint shareholders would get one share of the new company for each Sprint share while Nextel shareholders would get the equivalent of 1.3 Sprint Nextel shares for each of their shares, a small amount of that sum paid in cash.

At Wednesday's rates, each Nextel share would be exchanged for 1.28 Sprint Nextel shares and 50 cents in cash.

The exact breakdown for Nextel shareholders will be determined later, but the cash payment won't exceed $2.8 billion.

NASCAR.com

redriderbob

 

Nextel President and CEO Tim Donohue, left, and NASCAR chairman Brian France at a news conference in 2004.

Though NASCAR chairman Brian France was unaware that his premiere series' sponsor would make a business merger until it was reported in the media, he told NASCAR.COM Wednesday that he has no outstanding concerns regarding Nextel's partnership with Sprint Corp.

And, in fact, France said he's excited by the merger's potential to create a deeper pool of resources within the racing industry.

"I have no concerns about this (merger)," France said. "First of all, I'm excited for Nextel. They've always said they wanted to grow their company, and they're doing that. With the extra resources I think it'll help grow NASCAR, as well."

Makes sense. According to the Associated Press, the deal will create the third largest wireless telephone provider in the nation, behind only Cingular Wireless and Verizon Wireless. The AP report said the deal was structured as merger of equals that values each company at about $35 billion.

France said the development will not change the name of NASCAR's premiere series, which will remain the NASCAR Nextel Cup Series, nor the details of the current 10-year naming rights contract between NASCAR and Nextel.

Nextel forks out some $75 million annually for the rights to serve as NASCAR's Cup Series title sponsor, and president Tim Donahue said two weeks back during his "state of the sport address" in New York that they were, in fact, seeing a return on that investment.

France has spoken with Nextel executive Tom Kelly about the merger, but has yet to discuss the matter with Donahue, as Donahue has been focused on the transition to Sprint Nextel.

"They couldn't contact us about it because of various rules and regulations that prevent (discussing it)," France said. "They gave us what they could, when they could, which was very recently."

Both France and Donahue carried a gung-ho attitude regarding their partnership two weeks ago during the "state of the sport address" during banquet week in New York City, so it seems the relationship has taken no ill turns.

France is quick to point out, however, the importance of Nextel's knowledge on how best to use NASCAR to grow their brand.

"This clearly will build a bigger, better company for the folks at Nextel, which in turn will benefit NASCAR," France said. "There will be more resources, deeper resources.

"And it's important that Nextel knows already how to take advantage of NASCAR, and to teach their new partners how to do so. It's a big thing, and we want to help them grow their new company."

Sprint has dabbled in NASCAR before. They sponsored the No. 45 Chevrolets and Dodges driven by Adam and Kyle Petty for several years before pulling out following the 2002 season. But France says this is an entirely different animal.

"The position Nextel has is much different than Sprint's experience with just one race team," France said.

NASCAR.com

redriderbob