IP Democracy: It's Official: AT&T and BellSouth in Merger Pact

Given the flood of news stories and blog items today, AT&T and BellSouth went public with their merger deal. Under the deal, valued at $67 billion based on Friday’s closing prices, shareholders of BellSouth will receive 1.325 shares of AT&T common stock for each common share of BellSouth.

The companies hailed the merger as a cost-savings combination with “synergies” that exceed $2 billion on an annual basis and reflect a net present value of nearly $18 billion.

The new combined company will be headed by AT&T CEO and deal architect Ed Whitacre, although BellSouth CEO Duane Ackerman will stay on during a transition period. Three members of BellSouth’s board will join the board of the new company, which will be headquartered in San Antonio, TX, where AT&T is currently headquartered.

AT&T clearly has cable competition in its sites. The press release announcing the deal proclaimed

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&T’s groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs, coupled with BellSouth’s extensive deployment of fiber networks for DSL and other broadband services.

It’s clear that the two companies don’t expect any serious antitrust objections, or at least the public posture is that there won’t be any serious government obstacles to the merger. According to the press release

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.

While the headlines proclaim the merger to be a combination of two companies, in fact the deal will merge three companies — AT&T, BellSouth and the nation’s top mobile voice provider, Cingular, which is jointly owned by AT&T and BellSouth.

Posted by Cynthia Brumfield on March 5, 2006 4:23 PM to IP Democracy