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Telecommunications service providers Sprint Corp. and WorldCom Inc. agreed on Thursday to terminate merger plans. Neither Klinton, Miss.-based WorldCom nor Westwood, Kan.-based Sprint will be required to pay the $2.5 billion breakup fee which was stipulated in the original merger pact between the two companies. The proposed $129 billion dollar merger was fraught with disapproval from antitrust regulators. The European Commission seemed unlikely to approve it, causing WorldCom and Sprint to withdraw their application to the E.C. altogether, and on June 28, the U.S. Department of Justice sued to block the deal. The DOJ charged that the merger would curtail competition in Internet backbone operations, long distance, international calling and four other markets. In a press release issued Thursday, Sprint and WorldCom stated, “The companies mutually agreed that the set of conditions ultimately demanded by the U.S. Department of Justice would compromise the customer and financial benefits of the merger. Because the Justice Department asserted it could not be prepared to go to trial on its theories regarding the merger before next year, the companies decided it was not in the best interest of shareholders, customers and employees to pursue protracted litigation.” The financial adviser to Sprint was New York’s Warburg Dillon Read. Sprint’s legal adviser was King and Spalding, also of New York. WorldCom’s financial adviser was New York’s Salomon Smith Barney. Copyright (c)2000 TDD, LLC. All rights reserved.

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