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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: rhoffman who wrote (2915)	7/15/1998 7:12:00 PM
From: Anthony Wong	Read Replies (1) \| Respond to of 11568

WorldCom's MCI Purchase Wins Justice Dept. Approval (Update2) Bloomberg News July 15, 6:07 p.m. ET WorldCom's MCI Purchase Wins Justice Dept. Approval (Update2) (Adds comments from analyst and Cable & Wireless CFO.) Washington, July 15 (Bloomberg) -- WorldCom Inc.'s $49 billion purchase of MCI Communications Corp. was approved by the U.S. Justice Department after MCI agreed to sell its Internet business for $1.75 billion in cash to Cable & Wireless Plc. WorldCom's acquisition of the No. 2 U.S. long-distance provider still needs approval from the Federal Communications Commission, which the companies expect this summer. The new MCI WorldCom Inc. will be the second-largest U.S. telephone company behind AT&T Corp. The purchase makes Cable & Wireless the world's second- biggest Internet carrier as well as a force in the lucrative U.S. phone market. MCI WorldCom, which will control about a quarter of the $70 billion U.S. long-distance market, will remain the top carrier of Internet traffic, the fastest-growing part of the telecommunications industry. ''They (MCI and WorldCom) are still far and away the best on the Internet,'' said Jeffrey Heil, an investment officer at the Regents of the University of California, which owns 6 million WorldCom shares. Washington-based MCI rose 2 11/16 to 67, while Jackson, Mississippi-based WorldCom, the No. 4 U.S. long-distance company, climbed 2 to 54 3/4, both records. London-based Cable & Wireless's American depositary receipts rose 1 3/16 to 42, also an all-time high. Sale MCI agreed to sell its Internet business to ease regulatory concerns on both sides of the Atlantic that the combined company would dominate the global computer network. The business is expected to have $375 million in sales this year. ''The merger as originally proposed would have given WorldCom/MCI a significant proportion of the nation's Internet traffic,'' said Justice Department's antitrust chief Joel Klein. Analysts don't expect the FCC to raise red flags. ''The FCC's never blocked a merger, so the Justice Department is the key hurdle in any major review,'' said Scott Cleland, managing director of Legg Mason Inc.'s Precursor Group. The sale includes MCI's 1,300 wholesale customers that resell Internet services to other customers as well as 3,300 corporations that use MCI for direct Internet access. C&W also will get MCI's 250,000 consumer and 60,000 business dial-up Internet-access customers as well as 100 business that use its Internet security services. Cable & Wireless adds the routers and switches that direct the information on the network and will lease fiber-optic cable from MCI to carry the traffic. About 1,000 MCI employees will be transferred to Cable & Wireless. MCI WorldCom has agreed not to attempt to win back the wholesale customers for two years and corporate customers for 18 months. ''It's an exceptional opportunity for us to move into a new league,'' said Robert Lerwill, Cable & Wireless's finance director. C&W plans more acquisitions in the U.S., he said. --James Rowley in Washington 202-624-1913 and Andrew Brooks in