FRAMINGHAM (07/13/2000) - WorldCom Inc. and Sprint Corp. Thursday made it official: The two companies announced that they're dropping their proposed US$129 billion merger because of opposition from the U.S. Department of Justice and European regulatory officials.
The DOJ filed a lawsuit aimed at blocking WorldCom's acquisition of Sprint two weeks ago, and the termination of the merger agreement had been seen as a foregone conclusion since then. In their announcement, the companies said they had decided that conditions demanded by the DOJ in order to win its approval "would compromise the customer and financial benefits" expected from the merger.
WorldCom and Sprint added that they elected not to fight the DOJ in court because the agency had said it wouldn't be ready for a trial until next year -- a protracted schedule that the companies said "was not in the best interest of shareholders, customers and employees." No breakup fees will be paid by either company as part of the termination of the deal.
More details on the cancellation of the merger agreement will follow.