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BT, MCI REACH DEFINITIVE AGREEMENTS;COMPLEX GLOBAL TELECOM DEAL NEGOTIATED IN TWO MONTHS

 WASHINGTON, Aug. 5 /PRNewswire/ -- British Telecommunications plc (BT) (NYSE: BTY) and MCI Communications Corporation (NASDAQ-NMS: MCIC), two of the world's leading communications companies, today announced they have executed their agreements to form a worldwide strategic alliance. The definitive agreements, concluded in two months, provide for an aggregate investment by BT of $4.3 billion for a 20 percent ownership of MCI.
 As originally announced in June, the two companies will also form a new joint venture aimed at providing enhanced and value-added telecommunications services throughout the world. BT and MCI will invest approximately $1 billion in the joint venture over the next five years. BT will hold 75 percent of the new company's equity, with MCI holding the remaining 25 percent.
 "Both companies are proud of what we have accomplished in such a short period of time," BT and MCI said today in announcing the definitive agreements. "We said we would complete the complex agreements in two months and we came in on schedule."
 The companies announced that Chris Earnshaw, BT's managing director of worldwide networks, will be chief executive of the BT/MCI joint venture. The companies also confirmed that the Northern Virginia area has been selected as the location for its worldwide headquarters. A specific site has not yet been chosen.
 A related investment agreement calls for BT to acquire a 20 percent stake in MCI through the purchase of newly authorized shares of MCI Class A common stock at a blended price per share of $32 per share, representing in the aggregate approximately $4.3 billion, including the MCI convertible preferred stock sold to BT for approximately $830 million in June. BT's Class A shares will entitle it to designate up to three members of MCI's 15-member board of directors. MCI's chairman, Bert C. Roberts Jr., will become a member of BT's board of directors.
 In addition to board representation, BT will be entitled to investor protections with respect to certain corporate actions of MCI, commensurate with the size of BT's investment and the strategic relationship with MCI. BT also has agreed to a 10-year standstill period during which it will not increase its percentage holdings in MCI. BT has generally agreed not to transfer its Class A stock for at least four years. Any transferred Class A stock would automatically be converted to common stock.
 Also, in connection with the agreement, MCI will acquire most of the assets and business of BT North America.
 "The completion of the definitive agreements marks an important step in finalizing our alliance," said Alfred Mockett, BT's managing director-business communications. "BT's relationship with MCI will significantly expand competition in the global telecommunications marketplace, to the benefit of both business and consumers."
 "We're extremely pleased with the progress we've made in completing these agreements," said Daniel F. Akerson, president and chief operating officer of MCI. "It demonstrates both the commitment and enthusiasm both companies have about providing the world's best telecommunications services."
 The transactions are subject to a number of conditions, including MCI stockholder approval; required government approvals by the European Commission, the United Kingdom and the U.S. Federal Communications Commission; and expiration of waiting periods under the U.S. Hart-Scott- Rodino and Exon-Florio statutes. The transaction is expected to close in the first half of 1994.
 Other joint venture officers announced include: Kathleen R. Flaherty, senior vice president of MCI, will be senior vice president, worldwide sales and marketing, of the joint venture. She will be responsible for strategic marketing, product planning, global customer bids and outsourcing, including Syncordia, BT's global networking outsourcing unit that will be an integral part of the new company.
 Tom R. Rowbotham, BT's network and service development director, will serve as senior vice president, product development and engineering. He will be responsible for the technical planning, technology selection and launch of all products and systems for the new company.
 Christine C. Brennan, Syncordia's vice president, quality and human resources, was named vice president, human resources.
 Both BT and MCI will act as distributors to market the joint venture's branded products and services created by the new company. MCI will be responsible for North, South and Central America, as well as the Caribbean. BT will be responsible for Europe, Asia-Pacific and the remaining areas of the world.
 -0- 8/5/93
 /CONTACT: Pam Small of MCI Communications Corporation, 800-289-0073 or 202-887-3000, or Jack Baird of British Telecommunications plc, 404-333-4640/
 (MCI BTY)


CO: MCI Communications Corporation; British Telecommunications plc ST: District of Columbia IN: TLS SU: TNM

MH-DS -- DC006 -- 9702 08/05/93 08:46 EDT
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Date:Aug 5, 1993
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