AT&T, the US? largest telecomms carrier, is reported to be in merger talks with SBC Communications, which owns three of the seven Baby Bell telephone operators in the US.
According to today?s 'Wall Street Journal', the combined force would create a company with $80 billion in annual revenues, 230,000 staff, and 60 per cent of the $80 billion US long distance market.
The merger would be worth $50 billion and the combination of SBC and AT&T, MCI?s biggest rival, could upset BT?s indirect relationship with SBC. BT and SBC own 26 per cent and 15 per cent of France?s Cegetel, respectively. Cegetel was created by SBC, BT, Mannesmann, and Compagnie Generale Des Eaux, to be the second operator in France.
Apart from interests in Mexico, South Africa and Israel, SBC is present in the UK cable market. In 1995 it merged its cable television and telephony operations with UK cable company Telewest.
A merged company would combine the long distance telephony clout of AT&T with the SBC?s success in the local US market through brands such as Southwestern Bell, Pacific Bell and Nevada Bell.
However the deal could be blocked if the Justice Department sees the move as AT&T trying to rebuild itself as a national force after its painful divestiture in 1984. This led to the formation of the seven regional Baby Bells, and for AT&T to concentrate on the long distance market.
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