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Sprint, Nextel Agree To 'Merger Of Equals'

Sprint and Nextel announced Wednesday that they have agreed to a $35 billion merger that will create the third-largest wireless operator in the U.S.

The merged company, which the companies positioned as a merger of equals, will be called Sprint Nextel. The companies said the deal values each company equally and the new board of directors will have six members from each company.

The corporate headquarters will be in Reston, Virginia, the location of Nextel's current headquarters, and its operational headquarters will be in Overland Park, Kansas, where Sprint's current headquarters are located. Sprint's CEO, Gary Forsee, will be CEO of the new company while Nextel's current CEO, Timothy Donahue, will be chairman of the new company.

Sprint's local telecommunications business, which generated $6 billion in revenue last year, will be spun off to the shareholders of the new company, the companies said in a statement. Without the local telecom business, the combined companies would have generated about $34 billion in wireless revenue in the last year. The combined company will have about 35.4 million customers.

In a statement, the executives said the merger will create one strong company out of two previously solid companies. They stressed that the new company will spur competition in the wireless sector; competition is a key factor as governmental regulatory agencies consider the merger.

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