The four-year-old partnership, created to handle the three companies' international traffic, has been fighting an uphill battle for some time. Earnings have consistently been lower than originally expected, and the European members have been at odds over their own merger strategies. Rumors that Sprint wanted to pull out have been floating for months.
But it was Sprint's merger with MCI WorldCom that proved the final blow. MCI WorldCom carries a significant amount of international traffic itself, and regulators would be unlikely to approve the merger and allow Sprint to keep its own international partnership.
With that in mind, Sprint is now withdrawing from the partnership. The company said its existing Global One customers will be covered by a two-year transition plan, but added that it already has struck an agreement with MCI WorldCom for future international service.
"Our customers can be assured that Sprint will be able to deliver its complete line of international products, services and network support despite the change in ownership in Global One," Sprint chief executive William Esrey said in a statement.
Sprint's partners will pay the company $1.13 billion in cash and repay $276 million in debt in order to take over the full Global One venture.
As part of the agreement, the European companies--each of which hold a 10 percent stake in Sprint--will vote their shares in favor of the merger with MCI WorldCom, and relinquish their seats on Sprint's board after the merger is approved.
The Global One sale is expected to close within the next few months, Sprint said.