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AT&T eyeing IBM unit
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September 30, 1998: 2:46 p.m. ET
IBM Global Network could fetch up to $4B; other suitors also interested
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NEW YORK (CNNfn) - AT&T Corp. is negotiating to acquire the Global Network unit of International Business Machines Corp., the nation's leading long-distance provider confirmed Wednesday.
The talks underscore the importance placed on Internet infrastructure by telecommunication companies, which are racing each other as well as cable operators to establish a foothold in the burgeoning business.
Analysts said the IBM business could fetch up to $4 billion. But AT&T definitely isn't the only suitor.
"We've had a lot of interest," an IBM spokeswoman said. She declined to be specific.
With data transmission networks playing a greater role in the future of capital expenditures budgets, many telecom firms will need to consider acquiring an existing business rather than starting from scratch, said Kevin Moore, analyst at BT Alex. Brown.
"Clearly in a world where they are behind (players such as MCI WorldCom), it's not a matter of ease. It's a matter of time frame," Moore said.
The analyst said Sprint and regional Bell operating companies may also be eyeing opportunity.
IBM Global Network, which is involved in building high-speed data networks, has annual revenue of $2 billion and about 45,000 corporate customers.
The talks were made public during a conference with Rick Roscitt, president and chief executive of AT&T Solutions, according to Eileen Connolly, AT&T spokeswoman.
"However, it is premature and inappropriate for us to discuss this further," Connolly said.
-- from staff and wire reports
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