AT&T, Vanguard in $1.5 Billion Merger Pact
NEW YORK (Reuters) - In a move to boost its wireless telephone business on the East Coast, AT&T Corp. (T - news) said Monday it will buy Vanguard Cellular Systems Inc. (VCELA - news) for $1.5 billion, including about $600 million in debt.
Shareholders of Vanguard, which operates the Cellular One network, will get either $23 in cash or 0.3987 of an AT&T share, with the proviso that half that the overall purchase price will be paid in cash
and half in stock.
The companies expect the merger to close in the first quarter of 1999.
Vanguard Cellular has focused on rural and suburban markets, and now has 625,000 customers. AT&T, with more than 90 million customers around the globe, is the world's largest communications and information services company.
An AT&T spokeswoman said the acquisition would be important as a means to expand on the 1994 acquisition of McCaw Cellular, which gave AT&T the largest area of wireless coverage in North America.
The boards of both companies have approved the deal, which is still subject to the approval of Vanguard's shareholders, federal regulatory agencies and certain other conditions.
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