MCI WorldCom seen in talks to acquire Sprint
Compiled by CBS MarketWatch
NEW YORK (CBS.MW) MCI WorldCom, one of the last large U.S. carriers without a wireless phone service, is in talks to acquire Sprint and its wireless service, The Wall Street Journal reported Friday.
MCI WorldCom (WCOM: news, msgs) has been seeking ways to enter the wireless business amid surging demand among U.S. consumers. Rivals such as AT&T (T: news, msgs) are using wireless as part of a bundle of services aimed at enticing consumers into buying all the communications from one company. While those efforts have not hurt MCI so far, executives there are worried that eventually it will.
Still, an agreement could face significant obstacles over price, while regulators are sure to take a close look at a deal that would unite the No. 2 and No.2 U.S. long-distance carriers. Earlier this year, MCI broke off talks with Nextel Communications (NXTL: news, msgs), another national wireless carrier, after the two companies could not agree on a price.
Sprint (FON: news, msgs) has been rumored to be a buyout candidate for years, with the most recent rumors involving Deutsche Telekom. The carrier's main business has a market capital of about $40 billion. It Sprint PCS unit (PCS: news, msgs) is worth about $33 billion. If the deal did go through, it would constitute one of the largest acquisitions ever.
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