BusinessWeek: AT&T and BellSouth Talk Merger Code-named "Brazil," The Talks May be Aimed At Giving Ma Bell and the Former Piece of Its Old System the Heft to Rival SBC and Verizon.Business and Telecommunications Editors NEW YORK--(BUSINESS WIRE)--Sept. 27, 2001 AT&T CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Mike Armstrong Mike Armstrong (March 7, 1954 in Glen Cove, New York) played major league baseball from 1980 to 1987, mainly as a relief pitcher. Armstrong originally was drafted by the Cincinnati Reds in 1974. has proposed a "merger of equals" with BellSouth, BusinessWeek has learned. According to an article to be published in the October 8 issue, and published on the magazine's web site, sources familiar with the deal say AT&T dispatched President David Dorman in mid-September with the offer: AT&T would first spin off its cable TV unit, then merge its telecom business with BellSouth. CEO Duane Ackerman is interested if the price is right, according to sources quoted by BusinessWeek. The value of the deal and who would take over management are up in the air, BusinessWeek reports. The talks, code-named "Brazil," could fall apart at any time, or another suitor SUITOR. One who is a party to a suit or action in court. One who is a party to an action. In its ancient sense, suitor meant one Who was bound to attend the county court, also, one who formed part of the secta. (q.v.) could emerge. AT&T wants to seal the deal by the end of October, according to the sources. Neither company will comment on the proposal. After at&t spins off its cable unit, it will have a market cap of $30 billion to $40 billion--only about a third of BellSouth's $79 billion. The magazine notes that would make the "merger of equals" Armstrong envisages difficult. AT&T spun off its wireless unit earlier this year. Comcast is offering $35 billion for cable, but Armstrong is seeking bids from others such as AOL (A division of Time Warner, Inc., New York, NY, www.aol.com) The world's largest online information service with access to the Internet, e-mail, chat rooms and a variety of databases and services. Time Warner. The deal with BellSouth would reunite AT&T with a big piece of the old Bell system, which it spun off in a 1984 court-ordered breakup. Former Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. Chairman Reed Hundt said in 1997, when AT&T was considering merging with SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications, that such a deal was "unthinkable." But a lot has changed. The telecom industry is in a deep recession that has eroded AT&T's position. The current FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. is also more receptive to industry consolidation. There are obstacles, BusinessWeek notes BellSouth is barred by law from offering long-distance service in its nine-state local-phone territory in the South. AT&T is confident the deal could be approved with conditions. The Telecom Act bars BellSouth from owning such large stakes in cable. That's why AT&T is keen to sell it. The full text of BusinessWeek's report will appear in the October 8 issue of BusinessWeek, to be published Friday. The article has been posted on the magazine's web site at http://aol.businessweek.com/bwdaily/index.html. |
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