KANSAS CITY, Mo. – Sprint Corp. and Nextel Communications formally completed their merger Friday, forming a $76 billion communications company that already has moved its headquarters from Overland Park, Kan., to Reston, Va.

Sprint officials said Friday that the value of the merger, actually the acquisition of Nextel by Sprint, won’t be released until Monday morning. Based on closing stock prices Friday, however, the deal would be valued at about $38 billion.

Under the merger agreement, Nextel shareholders will receive a combination of stock and cash equal to 1.3 shares of Sprint stock.

The announcement was met quickly with a notice from a Nextel affiliate that could cost the merged company billions of dollars more by forcing it to buy the affiliate.

The merged company has been renamed Sprint Nextel Corp., but it will market itself primarily under the Sprint brand. It will have 44 million wireless customers and yearly sales of more than $40 billion.

“This is a great day for our investors, customers, employees and partners,” said Gary Forsee, chairman of Sprint and chief executive of the merged company.

Tim Donahue, Nextel’s chairman and chairman of the new company, said the merged company’s 44 million wireless customers will make Sprint a strong competitor in the wireless market.

“Communication is changing, and we are not only ready for it, we will lead it,” Donahue said.

The announcement came on the company’s new letterhead with its corporate headquarters’ address in Reston, Nextel’s current headquarters. Sprint’s operational headquarters will be in Overland Park.

Both Sprint, which traded on the New York Stock Exchange under the symbol “FON,” and Nextel, which traded on Nasdaq under “NXTL,” are dropping their former trading symbols. Shares of the merged company will begin trading Monday on the NYSE under the symbol “S.”

The merged company is expected to begin a new marketing campaign within 30 days. The company plans to convert its Nextel and Sprint stores to sell its products jointly.

In the meantime, Sprint officials said, current customers will not see any changes in service or prices.

The expected merger announcement came just after the markets closed Friday. It was met quickly by a notice from Nextel Partners Inc., a Nextel affiliate.

That notice, filed with the Securities and Exchange Commission, informs Nextel Partners shareholders that they can call a meeting that could trigger a purchase of the company by Sprint Nextel.

Under an agreement between Nextel Partners and Nextel, the affiliate can force a sale to any company that buys Nextel. The Reston company has said it will abide by the agreement.

However, the two companies have been firing documents back and forth, dickering over the value of the affiliate. Either way, if Nextel Partners shareholders trigger the buyout clause, it will cost Sprint billions of dollars more.

As of Friday, Nextel Partners was valued by Wall Street at about $7 billion. Nextel contends the value of the company has been inflated since news of the Sprint Nextel merger surfaced last year.

Nextel Partners has about 1.8 million customers, mostly in small cities and rural areas.

Nextel owns about 32 percent of Nextel Partners.

A number of lawsuits have been filed against Sprint by its own affiliates, contending the merger, which allows Sprint to sell Nextel service, violates Sprint’s agreement not to compete in affiliate territories. Sprint completed the purchase of one of those affiliates, US Unwired, on Friday.

Shares of both Sprint and Nextel hit new 52-week highs Friday before closing lower for the day. Sprint closed at $26.15, down 47 cents. Nextel shares closed at $33.32, down $1.17. Nextel shares dropped 90 cents in the last 30 minutes of trading.

(c) 2005, The Kansas City Star.

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Distributed by Knight Ridder/Tribune Information Services.

AP-NY-08-12-05 2014EDT

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