The US telecoms industry was poised last night for major upheaval as AT&T closed in on a deal to acquire BellSouth for about $66 billion (€54.8 billion).
The long-expected move will see AT&T consolidate its position as the largest US carrier and take full control of Cingular, the two companies' fast-growing wireless joint venture.
The acquisition marks the latest chapter in the reshaping of the US telecoms industry, where large mergers have been the answer to rapid changes in technology and the threat of competition from cable groups.
Edward Whitacre, chief executive of AT&T, has been the industry's most aggressive player, buying AT&T Wireless in 2004 for $41 billion and AT&T itself last year, in a $16 billion deal that allowed his company SBC Communications to take the AT&T name.
People familiar with the talks between AT&T and BellSouth said they had reached an advanced stage by yesterday, and that a deal would be announced imminently.
AT&T is expected to pay about $37 per share in stock for BellSouth, or an 18 per cent premium over the company's share price of $31.46 on Friday night. AT&T will also agree to take on about $1 7billion of BellSouth debt.
Although an AT&T takeover of BellSouth has long been expected, many telecoms industry watchers yesterday expressed surprise that an announcement had come so soon after the combination of SBC and AT&T.
News of the discussions immediately triggered speculation that the deal could spark a round of consolidation among the largest telecoms equipment makers, such as Lucent and Nortel. - (Financial Times Service)
