BT cuts purchase price for MCI by $5 billion

Article Abstract:

British Telecommunications announced that it would pay $5 billion less for the remaining 80% of MCI. The renegotiated merger, worth around $19 billion, represents a 22% reduction from the original $24 billion deal between the telephone companies. BT will pay $34 a share, down from the previously planned $43.50 per share. MCI shareholders would hold a 25% share in the merged company, Concert, instead of the original 34% stake. BT, which already owns the other 20% of MCI, demanded renegotiations after reports showed a sharp decline in MCI since November 1996. The new deal likely will help BT cement Concert operations and gain overall strength. MCI not only has struggled to join the $100 billion phone market, but the US company's core long-distance business has been weakening.

Telecommunications, British Telecommunications PLC, MCI Communications Corp., MCIC

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SBC-PacTel merger is likely to ring in an era of alliances among Baby Bells

Article Abstract:

The proposed merger between SBC Communications and Pacific Telesis Group may be indicative of an increased willingness among the RBOCs to cooperate with each other to provide a stronger front against larger long-distance companies. The remaining five RBOCs are actively engaged in exploratory talks intended to determine the benefits and drawbacks of future mergers such as the SBC-PacTel pact. However, the regional alignment of the RBOCs in 1984 was intended specifically to promote the maintenance of attentive customer service, and the RBOCs are already facing increasing criticism about declining service quality. The recent turbulence in the US telecommunications industry has led several powerful international telephone companies to examine the US market for possible entry.

Wired Telecommunications Carriers, Telephone Communications, Telephone services, AT&T Inc., SBC, Pacific Telesis Group, PAC

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