Communications Law Bulletin - February 2004 - (Continued)
Mondaq Business Briefing › United States Law Articles in English (2004)
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Communications Law Bulletin - February 2004 - (Continued)
Merger and Acquisition News
Cingular Wins Bid for AT&T Wireless; Regulatory Approvals to FollowOn February 17, 2004, Cingular Wireless ("Cingular") won its bid to acquire AT&T Wireless ("AT&T") for $41 billion. The $41 billion deal for AT&T, the equivalent of $15 a share, values the company at nearly 10 times its projected earnings for 2005. Cingular's competition for AT&T included UK-based Vodafone, against whom Cingular endured a bidding war, and earlier bids from DoCoMo and Nextel Communications. Vodafone holds a 45% stake in Verizon Wireless ("Verizon").Cingular, a joint venture between SBC Communications and BellSouth, is the second- largest wireless carrier in the nation today; AT&T ranks number three. Together, Cingular and AT&T will surpass Verizon and become the nation's largest wireless carrier with approximately 46 million subscribers. The consolidation will reduce the number of national wireless competitors from 6 to 5, which may lead to less ongoing pressure to cut consumer prices.The perception in the press is that Cingular, as opposed to other bidders, had the most to gain by acquiring AT&T because of projected cost savings from the consolidation of networks, marketing, advertising and other functions. The combined entity, which will be operated under the Cingular name, will have twice the spectrum and customer base as Cingular had before the acquisition. Layoffs are expected for AT&T employees due to "duplica...See the full content of this document
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