The deal is done: http://bellsouth.mediaroom.com/index.php?s=press_releases&item=2827
AT&T, BellSouth to Merge Combination Will Speed Innovation, Competition and Convergence Note: AT&T Inc. will hold an analyst conference call to discuss the merger that will be broadcast live via the Internet at 10 a.m. EST on Monday, March 6, 2006, at www.att.com/investor.relations or http://www.bellsouth.com/investor. -- Natural combination of two leading wireline providers and joint owners of Cingular speeds progress in integrated wireless/wireline services -- Substantial financial benefits for stockholders of both companies; an expected net present value of $18 billion in synergies resulting from a more than $2 billion annual run rate in synergies expected in 2008, growing to $3 billion in 2010 -- Expect merger to be accretive to AT&T adjusted earnings per share in 2008, double-digit adjusted EPS growth in each of next three years (earnings adjusted for merger integration costs and amortization of intangibles) and significant growth in free cash flow after dividends in 2007 and 2008 -- AT&Tâ€™s board authorizes share repurchase of 400 million shares by end of 2008; buy back of at least $10 billion in shares over next 22 months planned, with the majority in 2007 -- Merger will benefit customers and promote competition SAN ANTONIO and ATLANTA (March 5, 2006)â€”AT&T Inc. (NYSE:T) and BellSouth Corporation (NYSE:BLS) announced today an agreement to merge the two companies, a combination that will create a more effective and efficient provider in the wireless, broadband, video, voice and data markets. The merger will streamline the ownership and operations of Cingular Wireless, which is jointly owned by AT&T and BellSouth. The new company will be more innovative, nimble and efficient, providing benefits to customers by combining the Cingular, BellSouth and AT&T networks into a single fully integrated wireless and wireline Internet Protocol network offering a full range of advanced solutions. As a result, the combined company will be better able to speed the convergence of new and improved services for consumers and businesses, and embrace the industryâ€™s shift to Internet Protocol network-based technologies. â€œLogical Next Step That Creates Substantial Valueâ€ â€œThis merger is a logical next step that creates substantial value for customers and stockholders of both AT&T and BellSouth,â€ said AT&T Chairman and CEO Edward E. Whitacre Jr. â€œIt will benefit customers through new services and expanded service capabilities. It will strengthen Cingular through unified ownership and a single brand. And we are confident that this is a merger we can execute, based on our track record with previous integrations and our experience working closely with BellSouth to create and build Cingular Wireless, and operate Yellowpages.com. â€œThis transaction combines two solid, very well-run companies,â€ Whitacre added. â€œBellSouth operates in an attractive region with a growing economy. It has great employees and an outstanding network, with fiber optics deeply deployed in its service area. It has a strong record in terms of customer service and a sound, conservative balance sheet. These strengths, added to those of AT&T, will improve our ability to provide innovative services to more customers while returning substantial value to our owners and improving our growth profile.â€ â€œTechnology changes and convergence are shaping a new competitive dynamic and creating tremendous opportunity,â€ said Duane Ackerman, chairman and CEO of BellSouth. â€œWeâ€™re creating a company with much better capabilities to seize these opportunities while maintaining its strong focus on customer service and community involvement. â€œThis was the right time for this merger,â€ said Ackerman. â€œThis combination is good for our employees, our customers and our stockholders.â€ AT&T has committed to continue BellSouthâ€™s historic levels of charitable contributions and community activities, including the continued funding of charitable activities and economic development and education initiatives throughout BellSouthâ€™s nine state area. â€œOur focus is on providing great service and innovative, competitively priced products for consumers and businesses throughout the Southeast, the nation and the world,â€ said Whitacre. â€œTogether, we will lead the way into a new era of converged and bundled communications, video and entertainment services while also improving our ability to manage complex networks.â€ Customer Benefits Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP television networks and similar services as a result of AT&Tâ€™s groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouthâ€™s extensive deployment of fiber networks for DSL and other broadband services. Business customers in the southeastern United States and the rest of the country stand to benefit from the expertise and innovation of AT&T Labs, as well as the combination of AT&Tâ€™s state-of-the-art national and international networks and advanced services with BellSouthâ€™s local exchange and broadband distribution platforms and expertise. The combined company will have greater financial, technical, research and development, network and marketing resources to better serve consumers and large-business customers, and will accelerate the introduction of new and improved product and service sets for those customers. The merger would also give business and government customers, including military and national security agencies, a reliable U.S.-based provider of integrated, secure, high-quality and competitively priced services to meet their needs anywhere in the world. Since AT&T and BellSouth are not actual competitors in the local, long distance and video markets, and because BellSouth is not a significant competitor with AT&T in the enterprise market, the merger will not reduce competition in any of those markets. Terms and Conditions Under terms of the agreement, approved by the boards of directors of both companies, shareholders of BellSouth will receive 1.325 shares of AT&T common stock for each common share of BellSouth. Based on AT&Tâ€™s closing stock price on March 3, 2006, this exchange ratio equals $37.09 per BellSouth common share. This represents a 17.9 percent premium over BellSouthâ€™s closing stock price on March 3, 2006, and a total equity consideration currently valued at approximately $67 billion. The merger, which is subject to approval by shareholders of both companies, as well as regulatory authorities and to other customary closing conditions, is expected to close within approximately 12 months. Making the Most of Wireless One of the most immediate benefits of the transaction will be to streamline and enhance management and operations at Cingular. â€œThe Cingular partnership and the company itself are performing extremely well, particularly after the AT&T Wireless acquisition,â€ said Whitacre. â€œBut no partnership between two independent companies, no matter how well run, can match the speed, effectiveness, responsiveness and efficiency of a solely owned company.â€ While the majority of Cingularâ€™s operations will remain unchanged, simplifying the ownership structure will lead to more efficient marketing and service provisioning, which will come under a single AT&T brand, generating further financial synergies and customer benefits. The merger will also allow for closer integration of the companyâ€™s wireless, wireline, and IP products and services over a single global IP network. This is critical as the industry moves forward with convergence of the â€œthree screensâ€ that many consumers rely on most today â€“ televisions, computers and wireless devices. It is an area in which AT&T is a leader through its strategic partnerships with Yahoo!Â® and others. â€œWe are excited about the potential for bringing a robust set of integrated products and services to our customers in a faster and more effective manner under one brand,â€ said Ackerman. Financial Expectations In addition to the numerous customer benefits, AT&T and BellSouth expect the proposed transaction to yield substantial benefits for stockholders of both companies. The merger combines three companies that currently operate separately and independently: AT&T, BellSouth and Cingular Wireless. AT&T and BellSouth estimate that synergies from the combination will ramp quickly to reach an annual run rate exceeding $2 billion in the second year after closing, and estimate the net present value of expected synergies at nearly $18 billion. A substantial portion of synergies are expected to come from reduced costs in the operations of unregulated and interstate services, and corporate staff, and the synergies are over and above expected productivity improvements from the companies' ongoing initiatives. Approximately half of the total cost savings are expected to come from network operations and IT, as facilities and operations are consolidated and traffic is moved to a single IP network. Additional savings are expected to come from combining staff functions and from reduced ongoing advertising and branding expenses. Currently, the three companies support three distinct brands with three separate advertising campaigns. Following the merger, they expect to move to a single brand: AT&T. AT&T expects the transaction to be adjusted earnings-per-share neutral in 2007 and have a positive impact on its adjusted earnings per share thereafter (adjusted earnings per share exclude all merger integration costs and non-cash expenses for amortization of intangibles). AT&T expects that the merger will reinforce the guidance it provided at its Jan. 31, 2006, analyst conference. -- There is no change to AT&Tâ€™s 2006 outlook. -- AT&T continues to expect double-digit adjusted EPS growth in each of the next three years with significant growth in free cash flow after dividends. Free cash flow after dividends is expected to exceed $4 billion in 2007 and exceed $6 billion in 2008. -- Total revenues, including Cingular, are expected to return to growth in 2007, a year earlier than previous guidance. -- Capital expenditures, including Cingular, are expected to be in the mid teens as a percentage of revenues in 2007 and 2008. -- The transaction also is expected to improve AT&Tâ€™s overall growth profile â€“ driven by wireless, which will represent about one-third of the combined companyâ€™s expected revenues in 2007, and by expanded opportunities in business markets. -- AT&T expects free cash flow after dividends from the combined company to provide the flexibility to continue reducing debt levels over the next five years while providing excellent cash returns to stockholders. AT&T and BellSouth expect that the combined company will have a strong balance sheet with solid credit metrics. Both companies have single A credit ratings. Expanded Share Repurchase AT&Tâ€™s board of directors has approved an expanded share repurchase authorization of 400 million shares through 2008, replacing the existing program. Under this authorization, the company expects to buy back at least $10 billion of its common shares over the next 22 months. It expects at least $2 billion in repurchases during 2006, consistent with its previous guidance, and an additional $8 billion in repurchases in 2007. This repurchase authorization is intended to approximate the share premium paid to BellSouth stockholders as part of this merger transaction. The timing and nature of these repurchases will depend on market conditions and applicable securities laws. New Company Leadership Mr. Whitacre will serve as chairman, CEO and a member of the board of directors of the combined company. Mr. Ackerman will serve as chairman and CEO of BellSouth operations for a transition period following the merger. Additionally, three members of BellSouth's board of directors will join the AT&T board. The corporate headquarters for the combined company will remain in San Antonio. Cingularâ€™s headquarters will remain in Atlanta, as will the combined companyâ€™s Southeast regional telephone company headquarters. About AT&T AT&T Inc. is one of the world's largest telecommunications holding companies and is the largest in the United States. Operating globally under the AT&T brand, AT&T companies are recognized as the leading worldwide providers of IP-based communications services to business and as leading U.S. providers of high-speed DSL Internet, local and long distance voice, and directory publishing and advertising services. AT&T Inc. holds a 60 percent ownership interest in Cingular Wireless, which is the No. 1 U.S. wireless services provider with more than 54 million wireless customers. Additional information about AT&T Inc. and AT&T products and services is available at www.ATT.com. About BellSouth BellSouth Corporation is a Fortune 100 communications company headquartered in Atlanta, Georgia. BellSouth has joint control and 40 percent ownership of Cingular Wireless, the nation's largest wireless voice and data provider with 54.1 million customers. Backed by award-winning customer service, BellSouth offers the most comprehensive and innovative package of voice and data services available in the market. Through BellSouth AnswersÂ®, residential and small business customers can bundle their local and long distance service with dial-up and high-speed DSL Internet access, satellite television and CingularÂ® Wireless service. For businesses, BellSouth provides secure, reliable local and long distance voice and data networking solutions. BellSouth also offers print and online directory advertising through The Real Yellow PagesÂ® and YELLOWPAGES.COMâ„¢ from BellSouth. BellSouth believes that diversity and fostering an inclusive environment are critical in maintaining a competitive advantage in today's global marketplace. More information about BellSouth can be found at http://www.bellsouth.com/. And investor information can be found at http://www.bellsouth.com/investor. Cautionary Language Concerning Forward-Looking Statements We have included or incorporated by reference in this document financial estimates and other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These estimates and statements are subject to risks and uncertainties, and actual results might differ materially from these estimates and statements. Such estimates and statements include, but are not limited to, statements about the benefits of the merger, including future financial and operating results, the combined companyâ€™s plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the management of AT&T Inc. and BellSouth Corporation and are subject to significant risks and uncertainties and outside of our control. The following factors, among others, could cause actual results to differ from those described in the forward-looking statements in this document: the ability to obtain governmental approvals of the merger on the proposed terms and schedule; the failure of AT&T shareholders to approve the issuance of AT&T common shares or the failure of BellSouth shareholders to approve the merger; the risk that the businesses of AT&T and BellSouth will not be integrated successfully or as quickly as expected; the risk that the cost savings and any other synergies from the merger, including any savings and other synergies relating to the resulting sole ownership of Cingular Wireless LLC may not be fully realized or may take longer to realize than expected; disruption from the merger making it more difficult to maintain relationships with customers, employees or suppliers; and competition and its effect on pricing, spending, third-party relationships and revenues. Additional factors that may affect future results are contained in AT&Tâ€™s, BellSouthâ€™s, and Cingular Wireless LLCâ€™s filings with the Securities and Exchange Commission (â€œSECâ€), which are available at the SECâ€™s Web site (http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation, and expressly disclaim any obligation, to update, alter or otherwise revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. NOTE: In connection with the proposed merger, AT&T intends to file a registration statement on Form S-4, including a joint proxy statement/prospectus of AT&T and BellSouth, and AT&T and BellSouth will file other materials with the Securities and Exchange Commission (the â€œSECâ€). Investors are urged to read the registration statement, including the joint proxy statement (and all amendments and supplements to it) and other materials when they become available because they contain important information. Investors will be able to obtain free copies of the registration statement and joint proxy statement, when they become available, as well as other filings containing information about AT&T and BellSouth, without charge, at the SECâ€™s Web site (www.sec.gov). Copies of AT&Tâ€™s filings may also be obtained without charge from AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies of BellSouthâ€™s filings may be obtained without charge from BellSouth at BellSouthâ€™s Web site (www.bellsouth.com) or by directing a request to BellSouth at Investor Relations, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309. AT&T, BellSouth and their respective directors and executive officers and other members of management and employees are potential participants in the solicitation of proxies in respect of the proposed merger. Information regarding AT&Tâ€™s directors and executive officers is available in AT&Tâ€™s 2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and AT&Tâ€™s preliminary proxy statement for its 2006 annual meeting of stockholders, filed with the SEC on February 10, 2006, and information regarding BellSouthâ€™s directors and executive officers is available in BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February 28, 2006 and BellSouthâ€™s proxy statement for its 2006 annual meeting of shareholders, filed with the SEC on March 3, 2006. Additional information regarding the interests of such potential participants will be included in the registration statement and joint proxy statement, and the other relevant documents filed with the SEC when they become available. -----Original Message----- From: FISPA Members List [mailto:[EMAIL PROTECTED] On Behalf Of [EMAIL PROTECTED] Sent: Sunday, March 05, 2006 3:45 PM To: FISPA Members List Subject: [fispa-members] Bellsouth Merger? I believe the author of this is the Wall Street Journal reporter, I lifted if off the isp-clec list.... This is a well written overview, I thought. Paul AT&T Inc. is reportedly near a deal to but BellSouth Corporation for $65 billion in a transaction that would give it sole control over the company's largest wireless operator, Cingular. A report in the online version of The Wall Street Journal stated AT&T is nearing a deal to pay at least $36 per BellSouth share, up from BellSouth's trading price Friday of $31.46. That would push the total equity value of the deal to at least $65 billion, plus the assumption of an additional $17 billion of BellSouth debt, the report in the Journal said, citing people familiar with the deal. A deal may be announced Monday, the report added. WSJ Report: http://online.wsj.com/article/SB114153322699689697.html AT&T Inc. is nearing the acquisition of BellSouth Corp. for roughly $65 billion, people familiar with the situation said Saturday evening. A deal could be announced as early as Monday, these people said. Final terms of the deal could not be learned Saturday evening, but these people said AT&T Inc. would pay a premium for BellSouth shares of at least 15%, valuing the company at $36 per share at least, up from its trading price Friday of $31.46. That would push the total equity value of the deal to at least $65 billion, plus the assumption of an additional $17 billion of BellSouth debt. Spokespeople for BellSouth and AT&T declined to comment. An AT&T-BellSouth deal would effectively cleave the nation's telecom services in two, each vertically integrated with a local phone operation, business services, and wireless unit. And it would effectively validate the vision of competition laid out by the government -- one in which traditional telecom firms compete directly against cable operators rather than against each other. The move would give AT&T Inc. sole control over Cingular, the nation's largest wireless operator. A combination between AT&T and BellSouth could have combined market capitalization of nearly $160 billion, making AT&T far larger than rival Verizon. The deal would nonetheless set a showdown between AT&T and Verizon, as the two fight to control wireless, the growth portion of the telecom business. It was the steep growth of Cingular -- joint owned by BellSouth and the former SBC -- that helped push the two firms together, say telecom bankers familiar with the space. As the importance of the wireless business grew, they say, it became inevitable that SBC (which adopted the AT&T name just months ago) would consolidate its position in the South. Put together, the SBC territory would extend from California to Florida, north to Illinois and south to Texas. Combining the two companies' current market capitalizations, AT&T would have a market value approaching $150 billion, over 50% greater than Verizon. AT&T Chairman and Chief Executive Edward Whitacre has made a name for himself in the telecommunications industry as a serial acquirer. Mr. Whitacre is able to boast of a string of acquisitions including Pacific Telesis Corp., Ameritech Corp. and Southern New England Telecommunications Corp. But as he nears retirement the market had been anticipating one last hurrah from him; a BellSouth acquisition by AT&T has long been the subject of speculation from analysts, investors and the two companies' rivals. Still the speedy move to acquire BellSouth came as a surprise so soon after Mr. Whitacre's takeover of AT&T Corp. last fall. His company is just starting to digest the $16 billion acquisition. The former SBC Communications Inc. took over AT&T Corp. and adopted the AT&T moniker. The new company dominates nearly every aspect of the industry, from high-speed Internet connections to long-distance phone service, as well as wireless. And Mr. Whitacre now has access to the old AT&T's enterprise business and world-wide network. Such a deal would likely prompt howls of protest in some quarters as it comes on the heels not only of the AT&T-SBC deal but also after Verizon Communications Inc.'s acquisition of MCI. Those deals were approved with only a few minor conditions despite concerns they would lead to higher prices for business customers. The wave of mergers has dramatically reshaped the telecom industry, and a purchase of BellSouth would further cement the recreation of the old Ma Bell, which the government pushed to break up in 1984. The management of AT&T, which has apparently briefed key senior government officials late last week, appears to be betting that the Bush administration and a Bell-friendly Federal Communications Commission won't raise too many obstacles for such a deal, arguing that the companies serve different geographic regions and do not currently compete with one another in a significant way. Although AT&T and Verizon's last mergers passed both FCC and Justice Department review with little major problems, the latest proposed merger may face more hurdles. Recent comments by AT&T and BellSouth executives about their intentions to explore new revenue streams from their high-speed Internet services by introducing two-tier or "premium" service for Internet content providers. Concerns about those plans and the concept of "net neutrality," or ensuring that consumers have open access to all Internet sites and services and businesses do not find their content slowed, has become a major problems for the Bells in Washington. Meanwhile, the FCC that will be reviewing the AT&T/BellSouth deal will likely be a much different body soon with the addition of Robert McDowell, a veteran telecom lawyer who currently serves as assistant general counsel at Comptel, which represents smaller telephone companies and was a vocal opponent of the AT&T and Verizon mergers last year. Mr. McDowell is scheduled to appear before a Senate committee on Thursday for his confirmation and is likely to be asked about the merger. Although Mr. McDowell is a Republican, his nomination to the FCC was met with noticeable unease by the Bell companies, which have privately expressed some concern his experience working with smaller competitors may make him less than sympathetic to their concerns. ------------------------------------------------------- This mail sent by Aeneas Webmail: http://www.aeneas.net ####################################################################### This message is sent to you because you are subscribed to the <[EMAIL PROTECTED]> mailing list. To unsubscribe, mail <[EMAIL PROTECTED]>. To switch to DIGEST mode, mail <[EMAIL PROTECTED]>. To switch to INDEX mode, mail <[EMAIL PROTECTED]>. To switch to NULL mode, mail <[EMAIL PROTECTED]>. Send administrative queries to <[EMAIL PROTECTED]>. ####################################################################### This message is sent to you because you are subscribed to the <[EMAIL PROTECTED]> mailing list. To unsubscribe, mail <[EMAIL PROTECTED]>. To switch to DIGEST mode, mail <[EMAIL PROTECTED]>. To switch to INDEX mode, mail <[EMAIL PROTECTED]>. To switch to NULL mode, mail <[EMAIL PROTECTED]>. Send administrative queries to <[EMAIL PROTECTED]>.
-- WISPA Wireless List: firstname.lastname@example.org Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/