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AT&T, SBC said in talks
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May 27, 1997: 7:07 a.m. ET
$50-billion-plus deal could overhaul the telecommunications sector
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NEW YORK (CNNfn) -- AT&T Corp. and SBC Communications Corp. are reportedly in discussions to combine forces in a merger valued at more than $50 billion.
The deal could change the landscape on the telecommunications sector, the Wall Street Journal reported Tuesday.
However, a possible merger faces numerous hurdles, including consideration of the new management structure, financing, and a federal ban on SBC from entering the long-distance market before opening their own local region to competitors, the Journal reported.
The talks represent the first step by the old American Telephone & Telegraph Co. to reverse the landmark 1984 breakup agreement that created the seven regional Bell operating companies. It also comes as SBC, formerly Southwestern Bell, finds ways to integrate California-based Pacific Telesis Group, which it bought recently for $16.7 billion.
To be sure, other long distance providers aren't standing still. MCI Communications Corp. is on the verge of completing its tie-up with British Telecom. And Sprint Corp. is 20 percent owned by the national carriers of France and Germany.
Combined, AT&T and SBC would have nearly $80 billion in annual revenue, 230,000 workers, more than 60 percent of the $80 billion U.S. long distance market and a virtual lock on local and wireless communication services in the Southwest and California.
The paper reported public confirmation of the talks could come soon.
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SBC Communications
AT&T
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