Technology News
Tue, 09 Mar 1999, 3:31pm EST
AT&T Completes Its $59 Billion Acquisition of TCI (Update1)
AT&T Completes Its $59 Billion Acquisition of TCI (Update1)
(Adds company comment, details throughout. Updates shares.)
New York, March 9 (Bloomberg) -- AT&T Corp., the largest
U.S. telephone company, completed its $59 billion purchase of No.
2 U.S. cable-TV operator Tele-Communications Inc., a combination
that plans to offer phone, cable and Internet services to about
33 million U.S. households.
Stockholders of TCI Class A common will receive 0.7757
shares of AT&T for each share they hold. TCI Class B stockholders
will receive 0.8533 shares of AT&T for each Class B share.
The largest U.S. long-distance phone company plans to offer
local phone service in 10 cities this year through TCI's cable
system and later sell a package of local, long-distance,
wireless, cable-TV and other services. AT&T is forming ventures
with several U.S. cable operators to offer phone service to about
two-thirds of U.S. homes. It hopes to break the Baby Bell
stranglehold over the $100 billion-a-year local phone market.
''The closing of the TCI merger is a huge step forward in
the transformation of AT&T to an 'any distance' company,'' AT&T
Chairman C. Michael Armstrong said in a statement.
Broadband and Internet
TCI becomes a unit of AT&T Broadband and Internet Services
and will continue to be based in the Denver suburb of Englewood,
Colorado. Leo Hindery Jr., AT&T president and chief operating
officer, becomes chief executive of the division and will report
to Armstrong.
AT&T also is forming a tracking stock for TCI's Liberty
Media Group, a TCI affiliate that invests in TV programming
ventures. Liberty Media and TCI Ventures Group, another former
TCI affiliate, are being combined in a single company that be
headed by John Malone, TCI's former chairman and chief executive.
Malone also is expected to join AT&T's board during its March
meeting.
AT&T also is gaining TCI's controlling ownership interest in
At Home Corp., the leading company providing high-speed Internet
access over cable-TV systems.
AT&T Shares
AT&T said it will issue 439 million shares for TCI's stock.
This consists of 339 million of newly issued shares and another
100 million shares of stock repurchased in a stock buyback
program. AT&T will have 2.1 billion shares outstanding after the
stock swap.
AT&T shares fell 1 1/8 to 86 7/8 in late trading. Englewood,
Colorado-based TCI's Class A shares fell 9/16 to 67 5/16.
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