Motorola Inc. (NYSE: MOT) will report a $780 million gain next quarter resulting from the completion of the Sprint Nextel (NYSE:S) merger, according to Motorola's Friday filing with the Securities and Exchange Commission (SEC) (see 2004 Top Ten: Mergers & Acquisitions).

Prior to the completion of the merger, which occured August 12, Motorola held 54.7 million shares of Nextel stock. In exchange for those shares, the equipment maker gets approximately 69.3 million shares of Sprint Nextel Corp. stock as well as $46.3 million in cash.

The value of the Sprint Nextel stock at market rates today exceeds $1.8 billion, bringing the total value of the payout to around $1.85 billion.

Motorola has agreed to hold onto at least 37.6 million of its Sprint Nextel shares until at least through the end of next year, according to the filing.

But the windfall may not cover the long-term loss of business some expect Motorola to suffer as a result of the consolidation of the Sprint and Nextel networks (see Wireless Merger Favors Lucent, Nortel). Motorola was a long-time incumbent supplier at Nextel, and the sole supplier of the operator's iDEN network equipment (see 2004 Top Ten: Mergers & Acquisitions).

Motorola also has had a profitable relationship with Sprint. The company reported in January that it had received a $450 million wireless infrastructure contract extension from Sprint PCS through the end of 2006.

Sprint and Nextel announced last December that the two would form a new company in a merger valued at $35 billion (see Sprint, Nextel Confirm Merger). The combined company is expected to serve more than 35 million wireless subscribers and 5 million additional subscribers through affiliates and partners.

— Mark Sullivan, Reporter, Light Reading