AT&T is acquiring BellSouth in an all-share deal worth $67bn (£39bn), as the US telecoms market consolidates further.
The deal dwarfs the acquisition last year by SBC Communications of AT&T for $16bn (#9.2bn). That deal was criticised by consumer groups which were fearful that US customers would soon have little choice of service.
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SBC changed its name to AT&T and now it’s taking over one of the original “Baby Bells”, which were created in 1984 when AT&T was split up by regulators to, ironically, create a more competitive US telecoms market.
This latest deal is expected to receive an even more hostile reaction from consumer groups.
If the acquisition is given regulatory approval, the combined company will dwarf the nearest competitor Verizon Communications.
The combined company would generate sales of around $130bn and serve around 70m local phone customers.
After SBC bought AT&T, Verizon entered into a bidding war with Qwest Communications to buy MCI. It eventually won that bid and paid $8.44bn for the company.
The AT&T and BellSouth deal is expected to be completed within 12 months if it gets approval.