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To: Carter Patterson who wrote (2818)	7/8/1998 12:00:00 PM
From: Anthony Wong	Respond to of 11568

Bloomberg - WorldCom Wins Conditional European Union Approval for MCI Acquisition Bloomberg News July 8, 1998, 10:21 a.m. ET WorldCom Wins Conditional EU Approval to Buy MCI (Update2) (Adds analyst comment from 4th paragraph; statement from WorldCom in 8th paragraph; shares in 11th, 12th, 13th paragraphs.) Brussels, July 8 (Bloomberg) -- WorldCom Inc. said it expects its $46 billion purchase of MCI Communications Corp. to be finally cleared this summer after the European Union approved the plan to create the No. 2 U.S. phone company. While U.S. regulators must still approve the merger, they collaborated with the European Commission, the EU's executive agency, on the evaluation for the first time. To satisfy EU conditions, MCI agreed last month to sell its entire Internet business, which analysts said could fetch more than $1 billion. The companies must complete the sale within a certain time period and not try to win back former MCI Internet customers. The combined company, to be called MCI WorldCom, will have 1998 revenue of about $32 billion and will be the strongest competitor to No. 1 U.S. long-distance company AT&T Corp. MCI is the second-biggest U.S. long-distance company, while WorldCom is No. 4. ''WorldCom is now arguably in the leadership position of the global telecoms environment,'' said David Gillick, an analyst at A.T. Kearney, an independent telecommunications consultancy that is owned by Electronic Data Systems. ''All the telecoms incumbents have yet to really make it happen.'' The commission's green light ends a seven-month review centered on concerns WorldCom would dominate global Internet traffic. In a bid to stem regulatory opposition, MCI agreed in May to sell its wholesale Internet business to Cable & Wireless Plc, the No. 2 U.K.-based phone company, for $625 million. When that failed to satisfy regulators, MCI offered to sell its entire Internet business. The commission said the companies must seek EU and U.S. antitrust consent once they find a buyer for the Internet business. The U.S. Federal Communications Commission must also still rule on the creation of MCI WorldCom, which would own a quarter of the $70 billion U.S. long-distance market. ''In light of the close cooperation between the Commission and the U.S. Department of Justice, WorldCom and MCI look forward to the DoJ completing its review shortly,'' the companies said in a joint statement. Cable & Wireless declined to comment except to say it's still in talks with MCI. Naming a buyer for MCI's Internet business wasn't a condition for EU approval of the offer. Other Bidders? Cable & Wireless Chief Executive Richard Brown said two weeks ago the company is interested in buying all the Internet assets MCI must shed to get regulatory approval. Cable & Wireless's shares rose as much as 2.9 percent to 827 pence and were recently at 821.5 pence. WorldCom's stock has risen 47 percent since it announced it planned to buy MCI on Oct. 1 1997. The stock closed at 50 3/8 yesterday. In the same period, MCI's shares have risen 72 percent to close at 60 7/8 yesterday. Shares in British Telecommunications Plc rose as much as 3.4 percent to 832 pence because the company will gain $7 billion from WorldCom once its acquisition of MCI is cleared to pay for the 20 percent of MCI the No. 1 British phone company currently owns. Other possible bidders for MCI's internet business include IXC Communications Inc., AT&T and Williams Cos., analysts said. Commission and company officials have declined to comment on the deadline for the sale, or the period of time MCI has agreed not to compete for its former Internet customers. EU Competition Commissioner Karel Van Miert reviewed the acquisition in tandem with U.S. regulators. The U.S. Justice Department said June 30 it agreed with the EU position on the companies' Internet dominance. However, it won't approve the acquisition until it sees a signed sale contract for MCI's Internet holdings, according to people familiar with the investigation. After a decision from the U.S. Justice Department in the next few weeks, the Federal Communications Commission must then rule on whether the combination is in the public interest, pushing a final ruling back to the fall. --Dawn Hayes in the London newsroom (44-171) 330 7784 and Alison

To: Carter Patterson who wrote (2818)	7/8/1998 12:03:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

MCI, WorldCom At 52-Wk Highs As European Officials OK Pact July 08, 1998 11:49 AM NEW YORK (Dow Jones)--WorldCom Inc. (WCOM) and MCI Communications Inc. (MCIC) stocks both hit 52-week highs Wednesday after European regulators signed off on their proposed $37 billion merger. The 52-week high in MCI's shares was the sixth consecutive new mark. MCI stock has hit a new 52-week high in every trading day since June 30. The European approval, which was expected, came after European Union antitrust officials drove a hard bargain with the companies, forcing MCI to sell its Internet business so the combined company wouldn't have too much control over the Internet's main arteries. Regulators also are reportedly imposing conditions that will bar MCI from trying to quickly win its Internet customers back. MCI hasn't yet named a buyer for the Internet business, which could be desirable to many bidders. Although U.S. regulators have yet to approve the deal, the European approval was regarded by analysts as the toughest hurdle, since European and domestic regulators cooperated. Antitrust concerns centered on the combined company's share of the Internet backbone. GTE Corp. (GTE), which lost a bidding war for MCI to WorldCom, was a leader among those who complained that the combined company would control enough Internet traffic to choke competition. GTE, Stamford, Conn., said it is pleased that the European Commission is requiring MCI to sell its Internet business. It said it will continue to raise concerns with U.S. regulators about the combined company's share of the long-distance market here. MCI, Washington, D.C., and WorldCom, Jackson, Miss., said in a press release that they welcome the approval and expect to close their merger this summer. The deal will create a telecommunications mammoth second in size only to AT&T Corp. (T). The combined company will have combined 1998 revenue of about $32 billion and a powerful presence in virtually every part of the telecommunications market with the exception of local service to consumers. Recently, in moderate trading MCI shares hit their latest high of 62 11/16, before settling back to 62 1/2, a gain of 1 5/8, or 2.7% over Tuesday's close. WorldCom shares hit a new 52-week high earlier of 51 7/8, surpassing the previous mark of 50 9/16, reached July 2. More recently shares were up 1 7/16, or 2.9%, to 51 13/16 in moderate trading. -By Shawn Young; 201-938-5248