|
BellSouth buys Qwest stake
|
 |
April 19, 1999: 10:16 a.m. ET
Pays $3.5B for 10% to obtain digital telephony, e-commerce in Southeast
|
NEW YORK (CNNfn) - BellSouth is paying $3.5 billion for a 10 percent stake in Qwest Communications International as part of a deal between the companies to provide digital communications services.
Under the plan, Atlanta-based BellSouth (BLS) will have access to Denver-based Qwest's (QWST) data network, Internet and voice services. These services will run over the local carrier's lines, which have a strong presence in the Southeast.
"It's extremely important for us," Duane Ackerman, BellSouth's chief executive officer, told CNNfn's program "Business Day." It's "about data, it's about e-commerce, it's about Web hosting, it's about Internet telephony."
The companies immediately will start marketing their services together. Once BellSouth gets regulatory approval to enter the long-distance market, the firms will begin delivering high-speed data, image and voice communications services to business customers. BellSouth, the country's fourth-largest local carrier, will keep its regional emphasis. Qwest will focus on the rest of the country.
Under the deal, Qwest will issue about 20.35 million new shares to BellSouth in exchange for $1.89 billion cash. Qwest's principal stockholder, Anschutz Co., will sell 16.65 million shares to BellSouth for about $1.57 billion, reducing Anschutz' ownership of Qwest to 39 percent. Anschutz is headed by Philip Anschutz, a major corporate investor and owner of the NHL's Los Angeles Kings.
Joseph Nacchio, Qwest's chief executive officer, said the deal, the company's largest to date, has no bearing on Qwest's being an acquisition target.
"We've never concluded that we were or were not on the market," Nacchio said. "This is just another in a string of partnerships that will accelerate our growth."
The deal is expected to close by late May.
Qwest shares were up 9 to 91 early Monday while BellSouth edged up 7/8 to 42-1/16. 
|
|
|
|
|
 |
|
