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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (22)	6/27/2000 2:28:00 PM
From: Eric L	Read Replies (1) \| Respond to of 197283

The other shoe drops: >> *DOJ Lawsuit Aims To Block WorldCom, Sprint Merger* wirelessweek.com news@2direct June 27, 2000 The U.S. Department of Justice filed a lawsuit today to block the WorldCom-Sprint merger, ending nearly nine months of legal wrangling and speculation. News@2direct reported that the deal likely would be killed last Wednesday. U.S. Attorney General Janet Reno and Joel Klein of the DOJ Antitrust Division made a formal announcement at an 11 a.m. EDT press conference. The suit will seek a permanent injunction against the $129 million proposed deal between two of the largest telecom companies in the United States. ?This merger threatens to undermine the competitive gains achieved since the Department challenged AT&T?s monopoly?25 years ago,? Reno said. ?If WorldCom were allowed to acquire Sprint, large and small businesses and millions of individual customers would have to pay higher prices and accept lower service quality and less innovation,? Klein added. Sprint and WorldCom immediately issued separate statements. In a lengthy response, Sprint officials said they were ?disappointed that we have been unable to convince the [DOJ] that the merger is in the best interest of the American public and would advance competition.? In a very brief statement, WorldCom General Counsel Michael Salsbury said it will ?promptly review its options with Sprint.? European Union officials similarly bagged the plan yesterday, when EU antitrust chief Mario Monti also said the deal would stifle competition there and should be blocked. Neither company indicated whether they planned to fight the case, come up with an alternate plan or drop the merger proposal altogether. ?That?s the $100 million question,? says telecom analyst Jeff Kagan. ?It really depends on whether they?re willing to give up what regulators are going to require.? WorldCom needs a larger wireless presence, but also wants to keep its successful UUNet Internet backbone business. ?WorldCom is in a tough spot right now. Which [business] do you walk away from? Why give up one in the hand for two in the bush?? People close to the case say that WorldCom CEO Bernard Ebbers will likely drop the case before jumping into a legal battle with antitrust officials. If they drop the merger, WorldCom may eventually pursue Nextel to supplement its wireless holdings, or Kagan says it may succeed with a three-way deal to split up assets that concern regulators. One thing is for sure: ?[WorldCom] can live without wireless but won?t be able to grow as fast without wireless,? Kagan says. << - Eric -