The Associated Press Tucson, Arizona | Published: 03.06.2006 ATLANTA — AT&T Inc. is buying BellSouth Corp. for $67 billion in stock in a bid that further consolidates the telecommunications industry and would give AT&T total control of their growing joint venture, Cingular Wireless LLC.
The proposed purchase, announced Sunday, goes a long way toward resurrecting the old Ma Bell telephone system, which was broken up in 1984 under a federal court order. The merged company would have 70 million local-line phone customers, 54.1 million wireless subscribers and nearly 10 million broadband subscribers in the 22 states where it now operate. The deal appears to be the largest yet among U.S. telecom players. In 1999, MCI WorldCom Inc. agreed to buy Sprint Corp. for an even larger sum, $115 billion, but that deal was blocked by federal regulators. The sale, which is subject to regulatory and shareholder approvals, would give San Antonio-based AT&T total control over Atlanta-based BellSouth's nine-state network and its share of Cingular. AT&T owns a 60 percent share of the nation's No. 1 cell phone provider, while BellSouth has 40 percent. The deal would expand the reach of AT&T, already the country's largest telecommunications company by the number of customers served. Together, the three companies employ more than 316,000 people, though that head count may fall as AT&T eliminates redundant operations. After spending millions of dollars to rebrand AT&T Wireless Services Inc. stores as Cingular stores and hundreds of millions of dollars more on marketing the new Cingular after its $41 billion acquisition of AT&T Wireless in October 2004, Cingular will now become AT&T if the merger with BellSouth is completed. The BellSouth name also would be absorbed in the deal. "It's going to be confusing," said industry analyst Jeff Kagan. "This is the reinvention of the telecommunications industry." AT&T will pay 1.325 of its own shares for each BellSouth share. Based on Friday's closing price of $27.99 for AT&T shares, that works out to be $37.09 for each BellSouth share, an 18 percent premium from the Friday closing price of $31.46 for the company. AT&T Inc. was formed by SBC's acquisition of AT&T Corp. in November. The deal added a national reach to the former Southwestern Bell's local business, which is concentrated in 13 states, including Texas, California and the Midwest. BellSouth is the dominant local telephone provider in the Southeast. The shift in the U.S. telecom landscape — moving from four to three regional Bell operators — is sure to garner close review from Washington. "This merger proposal is one that unquestionably merits the utmost scrutiny by government antitrust officials," said Rep. Ed Markey, the ranking Democrat on the House Subcommittee on Telecommunications and the Internet. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "telecom-cities" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/telecom-cities -~----------~----~----~----~------~----~------~--~---
