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VoiceStream and Aerial to merge

VoiceStream Wireless Corp. (Nasdaq: VSTR) and Aerial Communications, Inc. (Nasdaq: AERL), a digital-cellular-phone company, said Monday they would merge to form a wireless network.

Shares in VoiceStream, which provides wireless communications services in the western United States, closed at 56 1/16 Friday. Aerial shares closed at 20, approaching their 52-week high of 20 1/4.

VoiceStream is expected to pay about $25 a share in stock and cash for each share of Aerial, making the deal valued at about $1.8 billion.

VoiceStream is now closing a merger with Omnipoint Corporation (Nasdaq: OMPT). When the Aerial and Omnipoint mergers are done, VoiceStream will have a total equity market capitalization of about $13 billion. For the quarter ended June 30, the three companies reported combined revenue over $825 million, and collectively served almost 1.5 million customers.

"After our mergers with Aerial and Omnipoint are completed, together with Cook Inlet Region Inc. (CIRI), nearly three out of every four people in the United States will live in VoiceStream markets," said John W. Stanton, chairman and chief executive officer of VoiceStream in a company release.

The combined company will form the largest GSM, or Global System for Mobile Communications, operator in the country, and in terms of people in licensed areas, it will be the largest GSM operator in the world, according to the release.

Telephone and Data Systems Inc. (AMEX: TDS) is the majority shareholder of Aerial. After the mergers, TDS will own approximately 14 percent of VoiceStream.

VoiceStream will exchange 0.455 shares of its common stock for each of Aerial Communications' shares.

In a separate announcement, Sonera has agreed to invest $500 million in VoiceStream at the closing of the Omnipoint merger, purchasing shares at $57 per VoiceStream share for a total stake of 8 percent interest in VoiceStream.

John W. Stanton will remain the chairman and chief executive officer of VoiceStream. Donald Guthrie and Doug Smith will be vice chairmen of VoiceStream. Bob Stapleton will be president and chief operating officer of the combined company.