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AT&T-BT gets EU nod
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March 30, 1999: 8:47 a.m. ET
Europe's watchdog approves $11B telecom tie-up; next stop Washington
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LONDON (CNNfn) - European competition authorities Tuesday approved the creation of a $11 billion joint venture between AT&T and British Telecommunications after the U.S. giant agreed sell its long distance phone subsidiary ACC U.K.
Europe's competition commissioner Karel van Miert gave the green light to the venture after AT&T also said it would create "greater structural separation" with U.K. cable operator Telewest, in which it will hold a 22 percent stake through its proposed acquisition of TCI Communications.
The U.S telecom giant also said it would withdraw from three joint ventures: the European Unisource alliance, the Asian venture called WorldPartner, and its tie-up with Germany's Mannesmann (FMMN), where it is involved in the Accor fixed-line telephone subsidiary.
The three divestitures had been anticipated but were not a requirement of the European ruling.
Shedding ACC U.K. , on the other hand, was needed to gain EU approval of the venture. ACC U.K. competes with some British Telecom operations.
The European Commission, the European Union's executive arm, gave its approval after concluding that the current state of competition in the transatlantic market "offered the necessary environment to enable the venture to go forward."
Enough competitors
Brussels noted that AT&T (T)and BT (BT.A) would have a combined market share of 30 to 50 percent of the global telecom market but was satisfied competition was strong enough.
"This is a dynamic market, and there are a number of competitors such as MCI Worldcom, GlobalOne and Equant present on the market as well as a substantial number of potential competitors," the commission said in a statement.
The link-up still needs U.S. regulatory approval. A BT spokesman said the two parties expected clearance from Washington "by the summer" but stressed that the timetable was not fixed.
The $11 billion AT&T and BT venture, if finally approved, would offer international telecommunications services to businesses. It was announced last July.
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