After Merger, Sprint Nextel Declares Dividend

In the wake of completing its merger on Friday, the newly-united Sprint Nextel Monday declared a stock dividend.

The company said in a statement that the nature of the dividend will help it spin off its local telephone business, which it expects to do within the next year. The company said it is offering its shareholders of the newly-merged company a dividend of 2.5 cents per share.

The company said in a statement that, while the dividend is less than the 12.5 cents per share that Sprint shareholders previously received, it "was set at a level consistent with the aggregate amount of dividends that Sprint Nextel's local telecommunications business is expected to pay" after that part of the business is spun off.

The result of the dividend will provide the local telecom business with "financial characteristics consistent with companies that have been rated 'investment grade' by major ratings agencies," Sprint said in a statement.