Sprint: No layoffs expected in Softbank deal, but Nextel name to be dropped
Sprint Nextel (NYSE:S) doesn't expect to conduct layoffs as part of Softbank's $20.1 billion deal to acquire to 70 percent of the company, according to a regulatory filing. Sprint also expects to drop the "Nextel" part of its corporate name if the deal is approved by regulators.
In a Sprint Security and Exchange Commission filing, which is a recap of a presentation made to Sprint employees Nov. 2, Sprint noted that Softbank "has a track record of acquiring and supporting companies during a turnaround without conducting employee reductions. We believe this transaction will position Sprint to grow and create new jobs."
The document notes that business should continue as usual for Sprint employees until as the deal moves toward approval, which Sprint expects in the middle of 2013. "Softbank has a strong track record in taking share of market from larger telecommunications competitors in mature markets," Sprint wrote. "Thus, we expect this transaction will strengthen Sprint, and U.S. consumers will benefit by having a stronger third wireless competitor."
As for Sprint's corporate name, the carrier said that if the deal is consummated "Sprint Corporation is expected to succeed Sprint Nextel Corporation's New York Stock Exchange listing as a publicly traded company" in the United States.
The name change should come as no surprise. Sprint plans to shut down the Nextel iDEN network by the middle of 2013 as part of its Network Vision network modernization upgrade. In the third quarter Sprint shut down 1,300 Nextel platform sites; the carrier has taken 9,600 Nextel sites offline so far in 2012. There are now 3.1 million Nextel subscribers left on Sprint's iDEN network, down from 20 million at its height.
Sprint also noted that, in addition to the FCC and Department of Justice, it and Softbank will "work with the Committee on Foreign Investments in the United States (CFIUS) and its member agencies, including the Department of Defense, to address any national security issues that emerge in the CFIUS process."
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