IP Democracy: Back-Story Color on the AT&T-BellSouth Deal

The New York Times’ Ken Belson has a colorful back-story on the AT&T-BellSouth merger and the bottom-line is this: some birds had to die for this merger to become a reality. Belson’s piece points out that the merger talks between AT&T and BellSouth, which actually began even before SBC sealed its deal to buy AT&T, were revived on a hunting trip that AT&T CEO Ed Whitacre and BellSouth CEO Duane Ackerman took in January.

When SBC absorbed AT&T in November, Mr. Whitacre turned once again to BellSouth because, among other reasons, the two companies were having trouble managing Cingular. In mid-January, Mr. Whitacre sent one of his bankers, Roger Altman, who worked in the Treasury Department under President Clinton, to approach Mr. Ackerman again and make an informal proposal. The next day, Mr. Whitacre and Mr. Ackerman went bird hunting, these people said. After their day out, the men promised to go to their boards and pursue a deal.

Another juicy tidbit from Belson’s piece: Ackerman and his lieutenants stand to gain some big pay-outs from the deal.

With the deal, Duane Ackerman, the chairman of BellSouth, and several of his top lieutenants stand to collect hefty special payments, according to the terms of their employment contracts. Mr. Ackerman, who 63 years old and nearing retirement, could sell $28,374,000 worth of restricted stock and options if he is asked to leave the company, according to publicly filed documents.

By some corporate standards, $28 million is not a big pay-out. Still, without this merger, BellSouth faced an uphill struggle to find growth and continued profitability — the executive team and the company itself seem to come out winners from the deal.

Posted by Cynthia Brumfield on March 5, 2006 11:45 PM to IP Democracy