To: Neil H who wrote (65216 ) 10/11/1999 3:39:00 PM From: kathyh Read Replies (1) | Respond to of 90042
more merger possibilites in telecoms arena...Monday October 11 2:49 PM ET Possible SBC, D.Telekom Linkup Could Boost Both By Ian Simpson NEW YORK (Reuters) - SBC Telecommunications Inc. and Germany's Deutsche Telekom AG (NYSE:DT - news) are reportedly in talks that analysts said Monday might deepen SBC's presence in Europe and bolster Telekom in the lucrative U.S. market. A weekend German newspaper report that SBC, the biggest U.S. local carrier, and Deutsche Telekom, Europe's No. 1 phone company, were in unspecified talks came amid renewed signs of relentless consolidation in the telecommunications business. Pressing the merger pace, Global Crossing Ltd (Nasdaq:GBLX - news). Monday bought the telecommunications arm of Britain's Racal Electronics Plc for $1.65 billion. With the buy, Global Crossing took a big step toward its goal of creating a global fiber optic network. And last week MCI WorldCom Inc (Nasdaq:WCOM - news)., the No. 2 U.S. long-distance company, said it would buy No. 3 carrier Sprint Corp (NYSE:FON - news). for $115 billion in stock, the biggest corporate merger ever. ''Obviously we have been and continue to move to an industry dominated by larger, fewer players,'' said David Burks, an analyst with J.J.B. Hilliard, W.L. Lyons in Louisville, Ky. Citing unnamed sources, the weekly newspaper Welt am Sonntag reported SBC and Deutsche Telekom were in talks. The report did not say whether they were about an alliance or merger. Spokesmen for the companies declined to comment. Shares in SBC, which completed its $61 billion acquisition of regional phone company Ameritech Corp. Friday, were up 50 cents at $52.50 in early afternoon. Deutsche Telekom's American Depositary Receipts were down 69 cents at $44.875. Analysts said a possible joining of forces between SBC and Deutsche Telekom offered both companies potential advantages. Deutsche Telekom, majority owned by the German government, might be able to restore itself in the U.S. market, the world's biggest, they said. Deutsche Telekom had a 10 percent share in Sprint as part of its Global One alliance with the U.S. company and France Telecom (NYSE:FTE - news) Following MCI WorldCom's jumbo deal for Sprint last week, Deutsche Telekom said it would sell its stake for $11.5 billion and use the cash for acquisitions. Tom Burnett, founder of research firm Merger Insight, said Deutsche Telekom needed to expand from its European base into the United States, the world's top telecommunications market. ''They are going to be sending out feelers to any number of companies,'' he said. ''The fact they are talking to SBC doesn't surprise me.'' SBC might be able to use a linkup with Deutsche Telekom as way to deepen its sizable hold in Europe, analysts said. Even before its Ameritech story, it had a 15 percent stake in French long-distance carrier Cegetel and a roughly 40 percent interest in Swiss telecommunications operator diAx. By buying Ameritech, its holdings include a 29.8-percent stake in Hungary's Matav, 17.5 percent of Belgium's Belgacom and 41.6 percent of Denmark's Tele Danmark . Richard Klugman, an analyst with Donaldson Lufkin and Jenrette, said competitive pressure might speed an SBC-Deutsche Telekom deal even though SBC was just coming off its enormous purchase of Ameritech. Earlier Stories SBC Declines Comment On Deutsche Telekom Report (October 11) Make a name for yourself online! --------------------------------------------------------------------------------