[GTE/Bell Atlantic merger]
To All. Important news today for Orckit.
gte.com
Bell Atlantic and GTE Agree to Merge
July 28, 1998
NEW YORK, N.Y., and STAMFORD, Conn., July 28, 1998 - Bell Atlantic
(NYSE: BEL) and GTE Corp. (NYSE: GTE) will merge in a transaction
joining Bell Atlantic's sophisticated network serving its dense,
data-intensive customer base with GTE's national footprint, advanced data
communications capabilities and long distance experience. The transaction
also creates one of the world's premier wireless communications companies
and combines two companies with extensive and complementary
international assets. The merger of equals was announced today by Bell
Atlantic Chairman Raymond W. Smith, Bell Atlantic Chief Executive
Officer Ivan Seidenberg, and GTE Chairman and Chief Executive Officer
Charles R. Lee.
The executives said a hallmark of the transaction is the ability of the
merged company to accelerate its growth by building upon its
complementary strengths to bring new, competitively priced services to
millions of consumers and business customers. It is anticipated that the
merged company, with 1997 combined revenues of $53 billion and a current
combined market capitalization of approximately $125 billion, will target
annual EPS growth of 15 percent, exceeding each company's current
expectations.
Under the terms of the definitive agreement, which was approved by the
boards of directors of both companies, GTE shareholders will receive 1.22
shares of Bell Atlantic stock for each GTE share they own. (GTE had
963,241,244 shares outstanding as of June 30, 1998.) The transaction is
expected to be tax-free to shareholders and to be accounted for as a pooling
of interests.
Based on investments they have already made, and the strategic fit between
them, the merged company will immediately have leadership positions and
enhanced growth potential in four key businesses:
Data: GTE is already a major provider of data and advanced Internet
services to consumers and businesses, with one of the industry's most
sophisticated data networks. Bell Atlantic serves millions of the
world's most information-intensive residential and business customers,
including the headquarters of 175 of the Fortune 500 companies, and a
huge base of multinational businesses. The merged company thus
combines a major provider of advanced data services with millions of
customers whose demand for these services is exploding. In addition,
both Bell Atlantic and GTE have committed to aggressive ADSL
deployments, positioning the merged company to be the leading
provider of advanced data services to the home.
Wireless: The merged company will be the nation's largest and most
advanced cellular service provider. Together, Bell Atlantic and GTE
currently have 10.6 million domestic wireless customers and more
than 100 million cellular POPs. The wireless technologies of the two
companies are both migrating to state-of-the-art CDMA technology
and are, therefore, fully compatible. Moreover, Bell Atlantic and GTE
have both demonstrated the ability to successfully integrate wireless
operations and to significantly enhance their efficiency and
profitability.
Domestic: With 63 million access lines, the merged company will
provide the crucial first-mile link to the global telecommunications
network for millions of homes and businesses in 38 states. As the
nation's largest local exchange carrier, and an emerging long distance
provider, it will be able to better serve its customers by using that
size and scope to drive down costs and speed new services to market.
International: With a significant presence in more than 30 countries
and virtually no overlap, the international portfolios of GTE and Bell
Atlantic are focused on some of the world's highest-growth markets.
The merged company will have significant international reach,
extending from Canada to Argentina and from Europe to Asia. In
addition, customers in its service territory currently account for more
than 30 percent of the world's international traffic. Those customers
represent an enormous business opportunity for the merged company
when it receives regulatory approval to handle long distance traffic.
This merger is creating an interesting situation on ADSL services both companies offer, as they buy their equipment from two different companies: GTE/Orckit vs Bell Atlantic/Alcatel. Does somebody have any thought how the merger will effect Orckit/GTE relationship, both short-term and long term?
thanks.
SoMo. |
