Sprint, Clearwire form WiMax venture
The new $14.55 billion wireless communications company will receive investment from tech titans Google and Comcast.
KIRKLAND, Wash. (AP) -- Clearwire and Sprint Nextel are planning to merge their wireless broadband units to create a new $14.55 billion wireless communications company.
The new company, to be named Clearwire, will receive a $3.2 billion investment from Intel Corp. (INTC, Fortune 500), Google Inc. (GOOG, Fortune 500), Comcast Corp. (CMCSA, Fortune 500), Time Warner Cable Inc. (TWX, Fortune 500) and Bright House Networks. The investment is based on a target price of $20 per Clearwire share and will give the companies a 22% stake in the new venture.
Sprint Nextel Corp. (S, Fortune 500) will be majority owner with a 51% equity stake, while existing Clearwire (CLWR) shareholders will receive about 27% interest.
Clearwire, which will concentrate on rolling out a mobile network based on the emerging WiMAX standard, will also receive an investment from Trilogy Equity Partners (TETFF), led by U.S. wireless industry veteran John Stanton.
WiMAX promises faster download speeds than the latest networks run by cell-phone operators, and it's even seen as a potential competitor to fixed-line broadband.
Sprint and Clearwire, a startup founded by cellular pioneer Craig McCaw, had already announced their plans to build out networks using WiMAX technology, but had been looking for outside funding.
The new company will be led by Clearwire Chief Executive Benjamin Wolff, with Sprint Chief Technology Officer Barry West serving as president. West also leads Sprint's XOHM division.
The Kirkland, Wash.-based venture will house workers from Clearwire and Sprint's XOHM unit and will have research and development and other operations located in Herndon, Va.
The deal, which has been approved by the boards of all companies involved, is expected to close during the fourth quarter. 
