4:00pm 03/03/2006
Posted on 03/05/2006 1:57:26 PM PST by Ernest_at_the_Beach
SAN FRANCISCO (MarketWatch) -- AT&T Inc. announced Sunday that it will buy regional-phone company BellSouth Corp. for $67 billion in stock, consummating a long-rumored deal that would create a gigantic communications provider with tentacles extending deep into the phone, wireless, Internet and even pay-TV markets.
: AT&T Inc.
Last: 27.99-0.29-1.03%
4:00pm 03/03/2006
) will exchange 1.325 of its shares for each share of BellSouth (BLS : BellSouth Corporation
Last: 31.46-0.42-1.32%
4:02pm 03/03/2006
) , representing a 17.9% premium compared with BellSouth's closing price on Friday. That would give each BellSouth share a value of $37.09.
Last: 27.17-0.21-0.77%
4:00pm 03/03/2006
)
Last: 33.58-0.42-1.24%
4:00pm 03/03/2006
) and Qwest Communications International Inc. (Q : qwest communications intl inc com
Last: 6.59+0.02+0.30%
4:01pm 03/03/2006
) would be the only Ma Bell offspring still in existence.
Its ownership in Cingular aside, BellSouth is also the dominant local phone company in nine Southeastern states; AT&T operates in 13 states such as California and Texas, A combined AT&T-BellSouth would control most of the local phone market in the most populous areas of the South and Midwest.
Jonathan Burton is MarketWatch's investments editor, based in San Francisco.
I already get a monthly bill from T for services which I do not use, and the statement seems to have increased at the rate of 50% a year.
I havent understood the phoone system since the government broke them up. First they were all one, then split into smaller ones , Now they are buying each other again.
This will end up with one big monopoly again.
I dumped AT&T as my long distance provider last summer, after lazily keeping them on from habit. I find that it's saving me around $200 a month. I could kick myself for not doing it much sooner.
No wonder they're trying to re-establish their monopoly. It's either that or go out of business.
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that it will buy regional-phone company BellSouth Corp. for $67 billion in stock, consummating a long-rumored deal that would create a gigantic communications provider with tentacles extending deep into the phone, wireless, Internet and even pay-TV markets.
The acquisition would also give AT&T sole control of Cingular Wireless, the biggest U.S. wireless operator with more than 54 million customers. AT&T owns 60%, with BellSouth controlling the rest. Under the agreement, AT&T ) will exchange 1.325 of its shares for each share of BellSouth representing a 17.9% premium compared with BellSouth's closing price on Friday. That would give each BellSouth share a value of $37.09.
A deal between AT&T and BellSouth would bring their Cingular Wireless joint-venture under the control of AT&T and establish a dominant communications provider with 70 million local telephone customers and almost 10 million broadband subscribers. In addition, AT&T said in a statement that the three distinct brands in question would be moved to a single brand: AT&T
Bell back on top AT&T Inc. was formed in November after SBC Communications acquired the old AT&T and adopted the famous name as its own. By adding BellSouth, AT&T Inc. would make itself the most formidable company in the communications industry and help the carrier to navigate a rising tide of competition from other phone operators or new rivals in the cable industry such as Comcast Corp.
In many ways, the former SBC has recreated the phone company once known affectionately as Ma Bell -- the longtime monopoly broken up in 1984 into one big long-distance carrier and seven local phone operators. Assuming the BellSouth deal gets regulatory approval, AT&T, Verizon Communications Inc. ) and Qwest Communications International Inc. would be the only Ma Bell offspring still in existence.
The AT&T-BellSouth combination -- subject to approval from antitrust regulators as well as the Federal Communications Commission -- is sure to get plenty of attention in Congress. Consumer-activist groups are expected to vociferously oppose the deal. Since Congress reshaped the nation's communications laws in 1996, consumer groups have been warning that a series of mergers would eventually create a Ma Bell East and a Ma Bell West. Even so, phone companies have found it difficult to raise prices due to an onslaught of competition. Long-distance rates have been falling for years, while prices of wireless-calling plans and high-speed Internet access also have tumbled. Only local phone rates haven't changed much. In that market, companies such as the new AT&T, Verizon and BellSouth still dominate, though they've been losing access lines for years.
Holding for new business Indeed, it's been the loss of local lines that has spurred the frenzy of dealmaking. Phone companies have been beefing up and expanding into new markets in an effort to reignite growth and shield themselves from competition. Many customers have switched to alternative technologies such as email and wireless or to nontraditional companies such as cable giant Comcast or startup Internet-phone supplier Vonage. BellSouth, however, was the only major Ma Bell offspring to eschew big mergers, although it explored its options on a number of occasions. The company's failure to bulk up put it at a competitive disadvantage to larger rivals AT&T and Verizon.
At the same time, SBC has long been known to harbor ambitions to own all of Cingular. As a result, many analysts believed it was only a matter of time before AT&T and its acquisitive-minded chief Ed Whitacre Jr. came calling. "The Cingular partnership and the company itself are performing extremely well, particularly after the AT&T Wireless acquisition," Whitacre said in a statement. "But no partnership between two independent companies, no matter how well run, can match the speed, effectiveness, responsiveness and efficiency of a solely owned company." Its ownership in Cingular aside, BellSouth is also the dominant local phone company in nine Southeastern states; AT&T operates in 13 states such as California and Texas, A combined AT&T-BellSouth would control most of the local phone market in the most populous areas of the South and Midwest. After the deal is complete, Whitacre would remain AT&T's chairman and chief executive. Duane Ackerman, BellSouth's chairman and chief executive, would remain in his position for a transition period of at least 90 days following the merger, according to AT&T spokesman Walt Sharp. The companies expect the deal to close in about 12 months, he added.
I dont know about other places, but the phones here have sucked since it was broken up. Noisy lines and old copper wires , no DSL here, and the biggest pisser of all was remembering when you had a problem and could talk to a human being. If that didnt work you could go into an office that actually had humans working there, AND they spoke ENGLISH. No spending 45 minutes on the phone punching buttons trying to get thru. I swear I would pay double if I could go to an office and speak to a human about phone problems.
So would I, but there is no guarantee that we would be seeing anything other then crappy service coupled with even higher prices. They have to recoup the $65 billion somewhere and they will be taking that from their customer's hides.
Ma, is that you?
As a SBC customer, I can tell you that as far as customer service, I have no hide left.
These mergers and acqusitions must take place before the next presidential election. If the Democrats retake the White House, the Antitrust Division of the Justice Dept. would probably block this deal as a violation of section 2 of the Sherman Act as tending to create and maintain an unlawful monopoly. The antitrust laws have been relegated to the dust bin since the election of 2000. The mega-mergers and rash of huge acquisitions have been blessed by DOJ without so much as a serious challenge.
You can say that again. Now it takes 3 to 5 days to get the line repaired. It used to take an hour or so.
Not as long as there are VOIP companies out there. Sure there may very well be only a couple of major players, but at least competition is allowed. There won't be any government coerced monopoly.
You have it right. Those who think competition will go down and prices will go up are wrong. First of all, AT&T already owns most of Cingular so they are not gaining a cellular presence. Secondly, how is the competitive landscape changed in Tulsa, Oklahoma because AT&T now owns lines in the SE? It isn't. That is why this will be approved.
With the sole exception of naked price-fixing, a GOP led Antitrust Division of DOJ permits virtually any merger, aquisition or business practice however injurious to the consumer or small business. I didn't create this fact, I merely observe that it exists.
Wonder which is the right way to go?
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