http://news.cnet.com/news/0-1004-200-2082335.html
AT&T, MediaOne merger a done deal
By Mike Ricciuti
Staff Writer, CNET News.com
June 15, 2000, 6:55 a.m. PT
Telecommunications giant AT&T said today it has completed its $44 billion
merger
with cable operator MediaOne Group, creating the country's largest cable
operator.
The companies said all regulatory approvals for the
deal have been
obtained. The FCC approved the merger last week. The
boards of
the two companies approved the deal in May of last
year.
The deal is valued around $44 billion, based on
AT&T's closing
stock price yesterday of $33.50. As previously
announced,
MediaOne shareholders will receive $30.85 in cash
plus 0.95
shares of AT&T stock for every share of MediaOne they
hold on the
closing date. Based on AT&T's recent stock price,
MediaOne
shareholders will receive an additional cash payment
of $5.42 per
MediaOne share.
AT&T plans to issue 606 million shares of common
stock and $23
billion in cash to close the transaction. After the
merger is
complete, there will be approximately 3.7 billion
AT&T shares
outstanding, and the company expects to have about 5
million
AT&T shareholders.
The combined company will become the country's largest cable operator,
with about 16 million
customers. AT&T said MediaOne will become part of AT&T Broadband, based
in the Denver
area. MediaOne's services eventually will be renamed under the AT&T
brand, the company
said.
As reported, the FCC's approval came with significant requirements that
will force AT&T to
comply with federal cable-ownership limits, which the company would have
exceeded. Cable
operators are forbidden from controlling, either directly or via joint
ventures, more than 30
percent of the market, and although the FCC tweaked those regulations
last year, AT&T would
have controlled nearly 42 percent of the market.
The FCC gave AT&T three options for attaining compliance, including
selling its stake in Liberty
Media, the company's cable TV programming unit, or selling MediaOne's 25
percent stake in
Time Warner Entertainment.
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