The boards of the companies met late into the night and, according to the Wall Street Journal, approved the acquisition of AT&T by SBC.
The final price is evidently around $16 billion and based entirely on SBC stock (0.77942 shares of SBC common stock for each common share of AT&T stock to be exact). That equates to a value $18.41 a share for AT&T’s sale price based on the price at which SBC shares closed on Friday. AT&T will also pay each shareholder a special dividend of $1.30 per share at the time of the closing. All of these numbers come from the Journal.
SBC are expected to keep the AT&T brand, at least for business customers. This is a very good idea, in my opinion, because the brand recognition that comes along with the AT&T brand is substantial. What SBC are really buying when they buy AT&T is their enterprise account base, which is pretty substantial.
The deal is expected to close sometime in the first half of 2006. That’s an extremely long time in the telecommunications industry. I would speculate that AT&T will go forward with their mobile offering using Sprint’s network. The terms of the closure of this merger is just too long for AT&T not to do this, and it might make a good talking point for how this acquisition won’t hurt competition. Likewise AT&T should push to take as much business as they can with the CallVantage voice over IP service.
