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VoiceStream, Omnipoint merge
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June 23, 1999: 9:34 p.m. ET
$4.5 billion merger would create nationwide wireless phone giant
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NEW YORK (CNNfn) - VoiceStream Wireless Corp. and Omnipoint Corp. Wednesday announced plans to merge in a deal valued at $4.5 billion in cash, stock and debt.
The deal would create one of the nation's biggest wireless communications companies with licenses to provide service to over 175 million people from New York to Hawaii.
"This merger brings together two great companies, Omnipoint and VoiceStream" said Doug Smith, chairman and chief executive officer of Omnipoint. "The combination of our two companies will be beneficial for consumers and will create opportunities for both employees as well as shareholders as the new business competes in the telecommunications marketplace."
Terms of the deal
Under terms of the deal, Bellevue, Wash.-based VoiceStream will exchange 0.825 of its shares, plus $8 in cash, for each share of Omnipoint, which values Omnipoint at about $32 a share, a 54 percent premium to Wednesday's closing stock price of 20-13/16.
In addition, VoiceStream will assume about $2.6 billion in Omnipoint debt.
There will be a cash or share election option available to shareholders of Omnipoint, subject to proration. VoiceStream said it expects the stock portion of the offer will be tax-free to Omnipoint shareholders.
VoiceStream (VSTR) also has committed to invest $150 million in Omnipoint (OMPT) prior to the close of the merger, including approximately $100 million to be provided immediately. The merger is expected to close in the fourth quarter of 1999.
In a related move, Cook Inlet Region Inc. (CIRI) has agreed to make an investment in a newly created joint venture owned 50.1 percent by CIRI and 49.9 percent by VoiceStream, in order to acquire the designated entity licenses held by Omnipoint Corporation.
Hutchison USA, the largest shareholder in VoiceStream, will invest $957 million into the combined company. After the merger, Hutchison will own approximately 30 percent of the combined company on the exercise of certain conversion rights.
John Stanton will remain the chairman and chief executive officer of VoiceStream. Doug Smith, the current chairman of Omnipoint, will become a vice chairman of VoiceStream, and will continue as chairman of Omnipoint Technologies. 
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OmniPoint
VoiceStream
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