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Qwest Communications International Inc. {QWST} and LCI International Inc. {LCI} plan to create the fourth-largest U.S. long- distance company through a $4.4 billion merger to be completed in the third quarter.
The deal, worked out over the last two weeks and finalized over this past weekend, was an unusually well-kept secret, a tribute to the "professionalism" of the companies' leaders, said Qwest President and CEO Joseph Nacchio.
"It's terribly important when you do a deal that you feel the chemistry is right," Nacchio said. "Initially each side is protecting their own position, but afterwards you're protecting the joint position. Unlike most negotiations, people didn't know about this deal until this morning." Terms Of Endearment The new company, to retain the name Qwest and the {QWST} stock ticker, will be run by Nacchio--a position he and LCI Chairman and CEO H. Brian Thompson jokingly said was decided by a "best-of-three" coin toss.
Terms of the merger call for LCI's stock to be converted into $42 worth of Qwest common stock, leaving LCI shareholders with about 122.4 million newly-issued shares of Qwest stock representing 36.4 percent of the combined company's shares. Nacchio and Thompson said that because there is little overlap in the two companies' services, they likely will avoid the type of huge layoffs generated by some other mergers.
"This is a unique combination," Thompson said. "It's a rare case in American business to have...