A Reborn AT&T To Buy BellSouth

[SOURCE: Wall Street Journal, AUTHOR: Dionne Searcey dionne.searcey@wsj.com, Amy Schatz, Almar Latour and Dennis K. Berman]
AT&T said it has agreed to acquire BellSouth for $67 billion, aiming to create a super-size phone company that reunites four of the Baby Bells created in the historic 1984 breakup of Ma Bell. It will boast a market capitalization of as much as $170 billion, larger than any other telecommunications operator in the world. The deal's terms also require AT&T to assume $22 billion in debt. The new AT&T will combine BellSouth's nine-state territory, which stretches from the Mississippi River to the Atlantic, with the old AT&T's customers on the West Coast, in the Southwest and Midwest, as well as businesses around the world. Consumer groups already have said they will oppose the deal, having long argued that consolidation in the phone industry reduces competition and raises prices. This is the fifth-largest U.S. deal ever, based on equity values, according to Dealogic, a markets data provider. Still, given telecommunications firms' poor track record of moving into new markets, there is no assurance the combined company will offer a better array of services than each side would have done alone. Nor is there any telling what new and unexpected competitors might be thrown up as communications technologies becomes cheaper and more widespread.
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