Another interesting article or a cry for attention!
Tuesday July 28, 2:16 pm Eastern Time
FOCUS-Bell Atlantic buying GTE for $52.8 billion in stock
(Combines takes, adds background, details)
NEW YORK, July 28 (Reuters) - Bell Atlantic Corp., the nation's largest regional phone company, has agreed to buy GTE Corp., the biggest independent local and long-distance carrier, for $52.8 billion in stock, the companies said on Tuesday.
The merger -- the latest in the rapidly consolidating telecommunications industry -- would create a giant phone company that would control more than a third of the U.S. local phone market and operate in 41 states.
Tuesday's announcement comfirmed rumors circulating since the weekend that a deal was in the works. It also comes on the heels of a $10 billion international telephone alliance struck over the weekend by AT&T Corp., the nation's largest long-distance operator, and British Telecommunications Plc.
Just eight weeks ago, two other regional ''Baby Bell'' phone companies, SBC Communications Inc. and Ameritech Corp., agreed to a $61 billion merger. Bell Atantic itself is the product of a $31 billion acquisition of Nynex Corp., which made it the dominant local telephone company from Maine to Virginia.
The latest deal is likely to put even more pressure on big companies to find key partners to fill strategic gaps in their operations. Long-distance companies are keen to find local phone partners to gain entry into that market, while local carriers want alliances that might eventually open the door to long-distance service, giving them a national presence.
The companies are especially keen to secure their positions in the booming markets for data transmission and wireless service, the fastest growing segments of the industry.
In part because of the recent consolidation, federal regulators are expected to take a hard, close look at the Bell Atlantic-GTE merger plan.
Under the deal, Bell Atlantic will issue 1.22 shares of its stock for each of GTE's 963.2 million shares, the companies said in a statement. Based on Bell Atlantic's closing price Monday of $44.94, the deal values GTE at about $54.83 a share.
In pre-opening trading Tuesday morning, GTE shares fell to $53.38 from its Monday closing price of $55.75, traders said. Bell Atlantic was not active.
The combined company -- to be headquartered in New York -- would have a stock market worth of $125 billion and annual sales of about $53 billion, they said.
GTE Chairman Charles Lee will be chairman and co-CEO of the combined company. Lee will share the CEO's office with Bell Atlantic CEO Ivan Seidenberg, who will also serve as president. The two companies will have equal representation on the new board.
The companies expect cost savings of up to $2 billion as well as growth in sales and earnings. (BEL - news; GTE - news; T - news; quote from Yahoo! UK & Ireland: BT.L; SBC - news) AIT.N>
(New York Newsdesk 212 859-1610) |
