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| Monday, 31 January 2005 | |
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This morning’s
approval by the boards of AT&T and SBC for the takeover of ‘Ma
Bell’ by its erstwhile ‘Baby Bell’ has come quickly, but for the deal
to be consummated it might be a long and painful process… Takeovers on any scale tend to be both short and long. First an unofficial signal allows the market to adjust its valuations; given the right responses, the deal is quickly agreed. And then the long wait for approval and completion begins. Predicated; predictable SBC’s takeover of AT&T was flagged late last week. AT&T shares duly rose by nearly 7% on the news that someone was ready to end its trauma; SBC shares fell by about 4%. Following confirmation of the US$16bn dollar bid today, the trends were reversed with SBC regaining lost ground and AT&T in retreat. This suggests either an equitable deal or one in which the agreed terms favour SBC. Other ‘Baby Bells’ could join the chase for AT&T and one or two global players should not be ruled out, either. MCI, the brand name of the one-time Worldcom, is also certain to be in play. Now, they’re in for the long haul. In a statement today, the bedfellows said that “the acquisition, which is subject to approval by AT&T's shareholders and regulatory authorities, and other customary closing conditions, is expected to close by the first half of 2006.” This window of counter-opportunity is thus opened for more than a year, and that’s a long time in telecom politics and business. Apple pie and Ma Bell "Today's agreement is a huge step forward in our efforts to build a company that will lead an American communications revolution in the 21st century," said Edward E Whitacre Jr, SBC chairman and chief executive officer. "We are combining AT&T's national and global networks and expertise with SBC's strong platforms and skills in local exchange service, wireless and broadband," Whitacre said: "it's a great combination." He said it, not me. Whitacre today also touched upon the delicate question of names and brands for the new company. "We value the heritage and strength of the AT&T brand, which is one of the most widely recognised and respected names throughout the world, and it will certainly be a part of the new company's future", he said. Beyond business services and international networks, it’s hard to see what he means when US$16bn is at stake. Jim Chalmers |
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