Nextel, Sprint Discuss Possible Merger"

NEW YORK -- Sprint Corp. (FON) and Nextel Communications Inc. (NXTL) are in the midst of merger discussions, according to people familiar with the matter.

Discussions are ongoing and the deal, these people say, is being treated as a merger of equals since the two companies share similar market capitalization of more than $30 billion. But the situation remains fluid and a deal isn't certain.

The two sides have worked out social issues between them, say people familiar with the matter.

Should it come together, the deal would unite Nextel -- the most profitable standalone wireless carrier, which is currently ranked fifth nationally -- with Sprint, which operates the nation's third-largest carrier. Nextel is dominated by high-paying business customers, attracted to its walkie talkie-like "push to talk" service.

Sprint has a heavier concentration of consumers among its 23.2 million subscribers. Sprint also operates the nation's third-largest long-distance business, as well as a sizable local telephone operation.

At about 2:45 p.m. EST, Nextel shares were up $1.88, or 6.7%, to $29.85 in trading on the Nasdaq Stock Market. Sprint shares rose $1.27, or 5.6% to $23.77 in trading on the New York Stock Exchange. Earlier the shares reached a new 52-week high of $24.05.

- Dennis K. Berman, The Wall Street Journal; 212-416-3284; dennis.berman@wsj.com

- Jesse Drucker, The Wall Street Journal; 212-416-3530; jesse.drucker@wsj.com

(END) Dow Jones Newswires"

Posted to the site on 9th December 2004