AT&T buys bellsouth

[Dr. Jack]

AT&T plans to acquire BellSouth in an all-stock deal valued at $67 billion, people with direct knowledge of the deal said Saturday night.

In addition, AT&T intends to assume about $22 billion of BellSouth's debt.
The deal, which is expected to be announced Monday, would create a telecommunications behemoth with more than $140 billion in annual revenue.
At $67 billion, AT&T would be paying an 18% premium for BellSouth's stock.

The combined entity will be called AT&T, and be based in San Antonio. That is the longtime home of telecom giant SBC, which late last year purchased AT&T and adopted the AT&T name.

The AT&T-BellSouth merger will solve, at long last, the problem of what to do with Cingular, jointly owned by AT&T and BellSouth. After the AT&T-SBC merger closed, AT&T announced plans to start selling Cingular services under the AT&T name. That caused some concern at BellSouth, which is still selling wireless services under the Cingular name.

Once AT&T acquires BellSouth it will gain total control of Cingular, the nation's largest wireless company. Over time, AT&T plans to drop the Cingular brand name to focus exclusively on its own name, people familiar with the situation said.

The mergers will cement AT&T's position as the USA's No. 1 telecom company.
Verizon, which recently purchased MCI, is No. 2.