This is a WSJ article published on the web at 8:31 PM (nothing new really):
Euro Commission, MCI, WorldCom Strike Merger Deal
By Julie Wolf And Jennifer Schenker
Staff Reporters of The Wall Street Journal
BRUSSELS -- The European Commission has reached an agreement with WorldCom
Inc. and MCI Communications Corp. that should allow it to clear the companies'
$37 billion merger, a commission spokesman said.
"The deal is struck," the spokesman, Stefan Rating, said. Although he
declined to give details, he said the two companies, as expected, met the
commission's key demand that they eliminate any overlap in their Internet
activities. "We are satisfied that it {the merger} won't bring about a dominant
position" in the so-called Internet backbone, the trunk lines used to transmit
data, he said.
The commission has demanded MCI shed its entire Internet business, given that
the companies refused to offer the sale of WorldCom's prized UUNet subsidiary.
MCI's announcement several weeks ago that it would sell its wholesale Internet
business to Cable & Wireless PLC for $625 million didn't go far enough to
satisfy the commission.
According to people familiar with the negotiations, the terms are likely to
include a no-compete provision that would either prohibit direct solicitations
or go further by requiring MCI and WorldCom to turn away contracts if
approached by customers of the company that eventually buys MCI's Internet
business. Also, MCI may be required to divest its intranet/extranet business
and transfer its Internet customers, including retail clients.
The accord paves the way for the full 20-member commission to approve the
merger on July 8, based on a recommendation from Competition Commissioner Van
Miert. After getting the go-ahead from the EU, the companies still would need
to have their merger approved by the U.S. Justice Department. Mr. Van Miert
said Tuesday that the Justice Department and EU antitrust regulators had
reached similar conclusions about the competition concerns raised by the
linking of the two U.S. telecommunications companies.
Both WorldCom and MCI said they couldn't comment on the outcome of the
commission's antitrust review until they are formally notified by the EU
regulator.
In Nasdaq Stock Market composite trading yesterday, MCI rose 75 cents to
close at $57.6875 and WorldCom rose 37.5 cents to close at $47.9375.
(END) DOW JONES NEWS 06-23-98
08:31 PM |
