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Mergers, Acquisitions, Alliances and Synergies Case Study

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Case Title:

Sprint and Nextel Merger : The Strategic Fit?

Publication Year : 2005

Authors: Blessy Keerthi, Srinath Manda

Industry: Wireless Telecom Services

Region: USA

Case Code: MAA0037

Teaching Note: Not Available

Structured Assignment: Not Available


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Abstract:
Sprint Corporation and Nextel Communication, the third largest and fifth largest wireless operators respectively in the US, announced the merger of their operations in December 2004. The merger results in the formation of a new company called Sprint Nextel thus creating the third largest wireless operator in the US. The $36 billion merger to be finalised by mid-2005 is expected to provide synergies such as an enhanced customer base of 35.4 million, cost savings of $12 billion, and stronger market position. Post merger, the company would have a large spectrum holding to make a head start in the advanced 4G technology area moving ahead of its competitors. Meanwhile, to make the merger a success the new company has to deal with challenges posed by incompatible technologies, cultural differences, and initial high integration costs.

Pedagogical Objectives:

  • To discuss the potential synergies, opportunities and challenges arising out of the merger for the new combined entity.

Keywords : Sprint Corporation;Mergers,Acquisitions,Alliances Case Study; Nextel Communications Inc.; US wireless telecom industry; Largest wireless operator; Merger of the equals; Average Revenue Per User (ARPU); Code Division Multiple Access (CDMA) technology; Integrated Digital Enhanced Network (iDEN); Push-to-talk technology; Third generation (3G) communications technology; Fourth generation (4G) communications technology; Evolution-Data Only (EVDO) network; Customer loyalty; Competitive strategies; Merger synergies and challenges

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Case Study :
   INR 200 = USD ($)

Structured Assignment:
   INR 150 = USD ($)

Teaching Note :
   INR 400 = USD ($)
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