Sprint and Clearwire Strike Wireless Deal

Updated from 11:54 a.m. EDT

Sprint Nextel (S Quote - Cramer on S - Stock Picks) and Clearwire (CLWR Quote - Cramer on CLWR - Stock Picks) have finally reached a $14.5 billion deal that will combine their wireless broadband businesses in a new communications company.

The new company, which will be named Clearwire, will deploy the first nationwide mobile WiMax network, considered a fourth-generation wireless technology that features fast data transfers over long distances.

Shares of Sprint were recently flat on the day, after rising 32 cents, or 3.5%, to $9.51 earlier. Clearwire was also off its early highs, up 1.46%, to $16.70.

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Sprint and Clearwire said they have received $3.2 billion in investments for the joint venture from Intel (INTC Quote - Cramer on INTC - Stock Picks), Google (GOOG Quote - Cramer on GOOG - Stock Picks), Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks), Time Warner Cable (TWC Quote - Cramer on TWC - Stock Picks) and fellow cable operator Bright House Networks.

The investment will be based on a target price of $20 for each of Clearwire's common shares. Sprint will hold the largest stake in the new company, owning approximately 51% of the equity. Existing Clearwire shareholders will own about 27%, and the investor group will be acquiring roughly 22%.

Sprint will contribute all of its 2.5 GHz spectrum and its Xohm-branded WiMax assets into the new Clearwire, a contribution worth approximately $7.4 billion. Separately, Comcast will invest $1.05 billion, Intel will invest $1 billion in addition to its previous investments made in Clearwire, Time Warner Cable will invest $550 million, Google will invest $500 million, and Bright House Networks will invest $100 million.

Sprint also expanded its partnership with Google, making the Internet giant its preferred mobile search provider. Meanwhile, Comcast, Time Warner Cable, and Bright House Networks will become bundled providers of Sprint's wireless voice and data services, expanding the reach of Sprint's network to more customers.