Mergers, Acquisitions and Takeovers Case Study

AT&T’s Merger with Bellsouth : Creating a One-Stop Shop

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Abstract:

In March 2006, AT&T Inc. (AT&T), the largest telecommunications company in the US, announced a $67 billion merger agreement with BellSouth Corporation (BellSouth), a leading telecommunications company in the US. The merger was aimed to create a nimble and efficient company that would be better equipped to embrace the industry’s shift to Internet Protocol network-based technologies. At the same time, the merger intended to simplify the ownership structure of Cingular Wireless, the largest mobile phone company in the US, which was jointly owned by both AT&T (60%) and BellSouth (40%).

The case, while providing a broad overview of the two telecom companies, offers scope to discuss the synergies of the merger and the probable payoffs.

Pedagogical Objectives:

• To understand the synergies associated with a merger and the probable pay-offs
• To understand the competitive forces of the US telecommunications industry
• To discuss the strategic shift of telecom companies from traditional services to bundled offering of video, data and voice services through broadband Internet access and network expansion
• To discuss the viability of AT&T-BellSouth merger and its impact on the business portfolio in the long-run.

Keywords : Mergers,Acquisitions,Alliances Case Study;AT&T Inc; Bellsouth; US telecommunications; Cingular Wireless; Merger; Verizon communications; Anti-trust law; Edward Whitacre; Bell System; DSL (digital subscriber line) broadband service; Synergies; VOIP (voice over Internet protocol)

Contents : 
Expected Synergies From The Merger
Consolidated Revenue Of At&T
Segment-Wise Contribution To Revenue Of At&T
The Us Telecom Industry
Verizon Communications