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SBC buying AT&T

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  • doug humphrey
    Now that SBC is going to buy AT&T we should consider that the new owner may not have the same level of traditions concerning old gov systems and infrastructure
    Message 1 of 6 , Feb 2, 2005
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      Now that SBC is going to buy AT&T we should consider that the new
      owner may not have the same level of traditions concerning old gov
      systems and infrastructure - what are the possibilities?

      1) SBC might want to sell some of the facilities that AT&T hangs onto
      by inertia - SBC has little cold war tradition, and may be more focused
      on "it pays, or it's out of here".

      2) The Archives - as we all know, they have already been under pressure
      and the new owner might not have the same approach as the old. That
      is putting it very nicely.

      3) ???

      what else do you guys think might happen?

      doug
    • Mark J Cuccia
      ... But at least two federal agencies must approve of the buyout -- the FCC, and either the FTC or DOJ. Maybe all three of them as well as others. And it has
      Message 2 of 6 , Feb 2, 2005
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        On Wed, 2 Feb 2005, doug humphrey wrote:

        > Now that SBC is going to buy AT&T we should consider that the new
        > owner may not have the same level of traditions concerning old gov
        > systems and infrastructure - what are the possibilities?


        But at least two federal agencies must approve of the buyout --
        the FCC, and either the FTC or DOJ. Maybe all three of them as well as
        others.

        And it has also been stated that a number of state regulatory agencies
        must also approve. I thought the news reports mentioned something like
        26 or 28 states, but when I could up Southwestern Bell (5:MO/KS/AR/OK/TX),
        Pacific Bell (CA) and Nevada Bell -- (2), Ameritech (5: OH/MI/IN/IL/WI),
        and (1) SNET (CT), I am only coming up with 13 states total.

        I don't know if BellSouth's 9 states (NC/SC/GA/FL/KY/TN/AL/MS/LA) would
        also be included as needing state regulatory approval, since both
        BellSouth and SBC togather own Cingular (and also Cingular took over
        AT&T-Wireless, although that was sort-of spun-out of the main AT&T a few
        years ago)... but adding in BellSouth's 9 states would bring it to 24
        states total.

        ALSO... since AT&T does business in all 50 states and DC, I don't know
        if each and every one of their agencies (as well as any regulatory
        bodies in the US territories and possessions, just about all of them
        are now in the NANP since American Samoa is now area code 684 under
        Country Code +1 as +1-684, and soon (2-April-2005) will no longer be
        country code +684) ....... all states (and territories) regulatory
        agencies, might also have to give their nod to a buyout.

        News reports I have read have said that it could take up to *TWO YEARS*
        to pass all of the regulatory hurdles.

        Once before in the late 1990s, SBC and AT&T tried to merge, but decided
        against it. I don't know if regulatory restrictions or just bad
        publicity/etc. was the cause for SBC and AT&T to ultimately back off at
        that time.

        Also remember that around 2000 or 2001, that MCI (Worldcom) and Sprint
        planned on merging, and that was in the news for many months. But when
        push-came-to-shove in the preliminary regulatory reviews of the
        situation, both MCI/Worldcom and Sprint backed out of the planned
        merger.

        Even though TPTB at AT&T and SBC have agreed to this buyout, I still
        can't say at this point that it's a "done deal". Even though big
        government and big business might be in bed togather, there could still
        be enough consumer groups with enough political pull, that could put
        enough pressure and bad publicity to cancel this proposal.

        So, while it's interesting to speculate on what could happen to AT&T
        *AND* SBC as we have known it, at least over the past 20 years since
        divestituture, it's still up to NUMEROUS federal and state regulatory
        agencies to all give their nod for the go-ahead.

        Bell Atlantic and GTE were able to merge into VeriZon, and even though
        both are into inter-LATA long distance these days (both resale and
        facilities based), neither one was still AT&T.

        But then again, with the reports about AT&T's "troubles" that we've been
        hearing/reading about for the past several years, federal/state
        regulatory agencies might just be so inclined to give the go-ahead even
        in this case.....

        We shall see.........

        Mark J. Cuccia
        mcuccia(at)tulane(dot)edu
        New Orleans LA CSA
        -------------------------------------------
      • Blake Bowers
        ... Actually, AT&T has started selling scads of stuff, SBC has frozen all their stuff a year or so ago, after a nasty fiber incident. (But they did recently
        Message 3 of 6 , Feb 2, 2005
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          > 1) SBC might want to sell some of the facilities that AT&T hangs onto
          > by inertia - SBC has little cold war tradition, and may be more focused
          > on "it pays, or it's out of here".
          >


          Actually, AT&T has started selling scads of stuff, SBC
          has frozen all their stuff a year or so ago, after a nasty
          fiber incident. (But they did recently release a couple
          of tower sites)
        • allan lawson
          yes--at&t has for yrs trying to get the union workers out of these sites---don t know what this buyout will do doug humphrey wrote: Now that
          Message 4 of 6 , Feb 2, 2005
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            yes--at&t has for yrs trying to get the union workers out of these sites---don't know what this buyout will do

            doug humphrey <doug@...> wrote:
            Now that SBC is going to buy AT&T we should consider that the new
            owner may not have the same level of traditions concerning old gov
            systems and infrastructure - what are the possibilities?

            1) SBC might want to sell some of the facilities that AT&T hangs onto
            by inertia - SBC has little cold war tradition, and may be more focused
            on "it pays, or it's out of here".

            2) The Archives - as we all know, they have already been under pressure
            and the new owner might not have the same approach as the old. That
            is putting it very nicely.

            3) ???

            what else do you guys think might happen?

            doug



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          • Daryl R. Gibson
            It s my belief that we have a whole lot less to worry about from SBC (or any of the other Baby Bells) acquiring AT&T than we do with the other likely
            Message 5 of 6 , Feb 2, 2005
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              It's my belief that we have a whole lot less to worry about from SBC
              (or any of the other Baby Bells) acquiring AT&T than we do with the
              other likely alternatives:

              1. AT&T dying off slowly at the hands of non-telecom people.
              2. AT&T sold (for the name only) to a buyout group.
              3. AT&T declaring bankruptcy under pressure from creditors.

              The biggest problem that AT&T has had in the last few years is a series
              of managers, many of whom were recuited from non-telecom companies,
              (but some of whom were old AT&T people who couldn't see the potentials
              for the future). Somehow, I think it will do better under a person who
              has a telecom background (SBC's CEO is former AT&T) and who understands
              the nature of service, than if it's given to another consumer-marketer
              who doesn't understand the background that the company has. SBC has
              proven to be a company which is willing to change with the times -- at
              least as much as any BOC could do, with the needs and responsibilities
              of continuing universal service in the telecom field, often with an
              outdated plant.

              Whether it will provide coldwarcomms researchers with all they seek
              would be another matter, but SBC is, after all, merely an initialized
              variant of the original name of the company, Southwestern Bell
              Corporation -- and I suspect it has a copy of the Golden Boy statue
              sitting around its corporate offices somewhere. I wouldn't be surprised
              to see the Bell System's "no job is so important and no task so urgent"
              motto in their offices.

              SBC, like all of the Baby Bells, still has plenty of people within it
              who understand what the phrase "Bell System" meant, even though
              admittedly, many of those people have retired, or are on their way to
              retirement. At the time of the breakup, AT&T didn't keep all the good
              people for themselves -- the Baby Bells were staffed with good people
              by the company.

              As a matter of curiosity, I'd be interested in finding out if since the
              acquisition of GTE by Verizon, if the new Verizon-GTE has picked up
              more Bell-standard practices than the old GTE had -- particularly in
              reliability, standards of service, etc.

              Anyway, I don't think that one of the Baby Bells acquiring AT&T is
              necessarily bad, and may indeed be the best thing that's happened to it
              in the last 20 years worth of missteps on AT&T's part. Of course, that
              assumes that the merger will go through, and that SBC will wind up
              being the actual party that acquires AT&T. They don't expect the merger
              to go through until next year, and there could be a lot of water under
              the bridge (and competing offers) by the time the merger comes to
              fruition.

              Daryl





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              keep your eye upon the doughnut, and not upon the hole"
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              Daryl R. Gibson, MCSE
              Office: (801)422-2950 Cell: (801)367-4341
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            • ozob99
              here s the (at&t)internal release: From: AT&T Public Relations Sent: Wednesday, February 02, 2005 2:34 PM Subject: AT&T TODAY Special Edition - Q&A about the
              Message 6 of 6 , Feb 2, 2005
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                here's the (at&t)internal release:


                From: AT&T Public Relations
                Sent: Wednesday, February 02, 2005 2:34 PM
                Subject: AT&T TODAY Special Edition - Q&A about the AT&T/SBC Merger


                AT&T TODAY



                WEDNESDAY, FEBRUARY 2, 2005 – 2:30 p.m. EST





                *** SPECIAL EDITION ***



                AT&T and SBC Merger Q&A

                Frequently-asked questions, new Web site

                offer information about the merger of AT&T and SBC



                As promised in yesterday's all-employee audiocast, below is an initial
                set of Q&A about the announced merger of AT&T and SBC. We've tried to
                address some of the most frequently-asked questions received from
                employees in this first round of communication. We will provide
                additional Q&A as soon as possible, and will use AT&T TODAY to alert
                you that they're available.



                We're also launching a Merger Update Web site at: http://infocenter.
                att.com/merger/ to provide additional details and to archive
                communication on the merger. As the merger progresses, we want to be
                sure employees are informed every step of the way. Be sure to write
                us at the AT&T Employee Communications mailbox at:
                rm-attemployeecomm@... if you have questions we haven't
                answered. We can't reply to individuals but will address questions
                representative of employee interest.





                Financial & Strategic



                Why is SBC acquiring AT&T?
                The merger of SBC and AT&T is an important next step in the evolution
                of the global communications industry. It brings together two
                companies with complementary strengths, product sets and customer
                bases to capitalize on the opportunities afforded by America's
                evolving telecommunications industry in the Internet age. This deal
                is about being best positioned to compete in the new IP world. AT&T
                operates the most advanced, highest volume, global IP network in the
                world. The potential synergies from this transaction are substantial
                and very achievable. It gives AT&T the greater financial strength and
                stability it needs for success over the long term. It gives SBC a
                significant domestic and global presence in the governmental and
                large-business customer segments, an area where SBC has less presence
                today. We believe that SBC and AT&T have complementary strengths,
                assets and customer bases that, together, will help the company offer
                more advanced services to customers, grow revenues, and reduce
                expenses to a much greater extent, and more quickly, than would have
                otherwise been possible.


                What are the terms of the deal?

                Under the terms of the agreement, stockholders of AT&T will receive
                total consideration valued at $19.71 per share at the time the
                agreement was signed. That includes 0.77942 shares of SBC common
                stock for each common share of AT&T. Based on SBC's closing stock
                price on Jan. 28, 2005, this exchange ratio equals $18.41 per share.
                In addition, at the time of closing, AT&T will pay its stockholders a
                special dividend of $1.30 per share. Altogether, this is a $16
                billion transaction.


                Where will the expected $2 billion in annual cost savings come from?
                Almost all of the synergies are expected to come from reduced costs
                over and above expected cost improvements from the companies' ongoing
                productivity initiatives.



                · Nearly half of the total net synergies are expected to come
                from network operations and IT, as facilities and operations are
                consolidated.



                · Approximately 25 percent are expected to come from the
                combined business services organizations, as sales and support
                functions are combined.



                · About 10 to 15 percent of the synergies are expected to come
                from eliminating duplicate corporate functions.



                · Approximately 10 to 15 percent of expected synergies come
                from revenues, as the combined company migrates service offerings to
                new customer segments.





                Employee/HR-Related



                Will employees still receive a 2004 bonus and salary merit increase?

                Yes, as announced previously, qualified employees will receive a bonus
                for 2004 payable in March 2005 and a salary increase effective April
                1, 2005.



                Will there be a 2005 bonus plan?

                Yes, we'll soon send you information on the 2005 bonus plan, which
                would be payable in 2006 for qualified employees if we meet our
                targets.



                Will the pending merger affect benefits for employees covered under
                the collective bargaining agreements?

                No, the terms of the current bargaining agreements will remain in
                effect.



                Will the pending merger impact AT&T's management benefits prior to the
                close, and how soon after the close might benefits be changed?

                AT&T's benefit plans and programs will continue "business as usual"
                through the closing in accordance with their terms. Any decisions
                regarding benefits after the close will be made by SBC. However,
                under the merger agreement, SBC has agreed that employees and former
                employees for a period of time after the merger will have compensation
                and benefit plans and programs that are no less favorable in the
                aggregate than they have at AT&T. This commitment will continue to
                the end of the plan year (generally Dec. 31) following the first
                anniversary of the closing. For example, if the merger closes in
                2006, the commitment will generally apply through Dec. 31, 2007.



                Will the Rule of 65 continue to apply in 2005 and 2006?

                The expanded eligibility for retirement-related benefits (Rule of 65)
                applies to employees covered under the AT&T Force Management Program
                with scheduled off-payroll dates before Jan. 1, 2006. (Generally, to
                be eligible under the Rule of 65, the employee's age and years of
                service must total at least 65 at the off-payroll date.) Should the
                merger close in 2006, any extension of the Rule of 65 requires AT&T to
                consult with SBC, which we would plan to do. As more information
                becomes available, it will be communicated to employees.



                Are AT&T's pensions/cash balance accounts secure? Will the plans
                change because of the merger announcement prior to the close? Will
                the AT&T pension plans continue after the merger?

                The AT&T pension plans will not change as a result of the merger
                agreement. Individuals currently receiving pensions can be confident
                that there will be no disruption in receiving their monthly pension
                annuities from AT&T in accordance with the terms of AT&T's pension
                plans. You should be aware that under law, companies cannot reduce or
                eliminate a person's accrued and vested pension benefit under
                tax-qualified plans, such as AT&T's. In addition, AT&T's pension
                plans remain well funded. Pension funding is highly regulated under
                various Federal laws and our plans are fully in compliance with those
                funding rules. Any decisions regarding the pension plans after the
                merger closes will be made by SBC, subject to the commitments
                discussed above.



                What happens to any unvested AT&T restricted stock unit award?

                At the time of a change in control as a result of the merger closing,
                any unvested AT&T restricted stock unit award, granted on or before
                Feb. 3, 2005, would become free of all restrictions, limitations or
                conditions and become fully vested.



                Will my years of AT&T service be recognized at SBC?

                AT&T service will be recognized if employees become covered under
                SBC's compensation and benefit plans for eligibility, vesting and
                benefit accrual, with the exception of benefit accrual for defined
                benefit pension and other retirement plans.



                Merger Approval Process



                What approvals will be required?

                AT&T's shareowners, the FCC, the U.S. Department of Justice, various
                state regulatory agencies, and a small number of foreign approvals.



                How long do you anticipate regulatory approval will take?

                Because it brings together two companies with complementary strengths,
                product sets and customer bases, will help advance competition in
                several key areas, and will help revitalize America's
                telecommunications industry, we believe regulators will review it
                expeditiously. That could come as early as the first half of 2006.
                We intend to cooperate fully with their reviews and provide the
                information they request as quickly as possible.



                Other



                Where will the new company headquarters be located?
                The combined company will be headquartered in San Antonio, but will
                continue to maintain a strong employee presence in all of its key
                regions.



                Should I contact my counterpart in SBC to begin the merger transition?

                No, we will communicate guidelines soon. Please remember, we are
                still separate companies and must continue to operate separately until
                the closing.



                Where can I learn more about the merger?

                We'll be communicating more information in the weeks and months ahead,
                but you can learn more now about the merger by going to the Merger
                Update Web site at: http://infocenter.att.com/merger/





                Cautionary Language Concerning Forward-Looking Statements

                This document contains forward-looking statements within the meaning
                of the U.S. Private Securities Litigation Reform Act. Forward-looking
                statements are statements that are not historical facts and are
                generally identified by the words "expects", "anticipates",
                "believes", "intends", "estimates" and similar expressions. These
                statements include, but are not limited to, financial projections and
                estimates and their underlying assumptions, statements regarding the
                benefits of the business combination transaction involving AT&T and
                SBC, including future financial and operating results and the plans,
                objectives, expectations and intentions of the combined. Such
                statements are based upon the current beliefs and expectations of the
                managements of AT&T and SBC and are subject to significant risks and
                uncertainties (many of which are difficult to predict and are
                generally beyond the control of AT&T and SBC) that may cause actual
                results to differ materially from those set forth in, or implied by,
                the forward-looking statements.



                The following factors, among others, could cause actual results to
                differ materially from those set forth in the forward-looking
                statements: the ability to obtain governmental approvals of the
                transaction on the proposed terms and schedule; the failure of AT&T
                shareholders to approve the transaction; the risk that the businesses
                will not be integrated successfully; the risk that the cost savings
                and any other synergies from the transaction may not be fully realized
                or may take longer to realize than expected; disruption from the
                transaction making it more difficult to maintain relationships with
                customers, employees or suppliers; competition and its effect on
                pricing, spending, third-party relationships and revenues. Additional
                factors that may affect future results are contained in SBC's and
                AT&T's filings with the Securities and Exchange Commission ("SEC"),
                which are available at the SEC's Web site http://www.sec.gov. Other
                than as required by applicable law, AT&T disclaims any obligation to
                update and revise statements contained in this presentation based on
                new information or otherwise.


                Additional Information

                In connection with the proposed transaction, SBC intends to file a
                registration statement, including a proxy statement of AT&T Corp., and
                other materials with the Securities and Exchange Commission (the
                "SEC"). Investors and AT&T shareholders are urged to read the
                registration statement, including the proxy statement, and other
                materials when they are available because they contain important
                information. Investors will be able to obtain free copies of the
                registration statement and proxy statement, when they become
                available, as well as other filings containing information about SBC
                and AT&T Corp., without charge, at the SEC's Internet site (http:
                //www.sec.gov). These documents may also be obtained for free from
                SBC by directing a request to SBC Communications Inc., Stockholder
                Services, 175 E. Houston, San Antonio,Texas 78258. Free copies of AT&T
                Corp.'s filings may be obtained by directing a request to AT&T Corp.,
                Investor Relations, One AT&T Way, Bedminster, New Jersey 07921.



                SBC, AT&T Corp. and their respective directors and executive officers
                and other members of management and employees may be deemed to be
                participants in the solicitation of proxies from AT&T shareholders in
                respect of the proposed transaction. Information regarding SBC's
                directors and executive officers is available in SBC's proxy statement
                for its 2004 annual meeting of stockholders, dated March 11, 2004, and
                information regarding AT&T Corp.'s directors and executive officers is
                available in AT&T Corp.'s proxy statement for its 2004 annual meeting
                of shareholders, dated March 25, 2004. Additional information
                regarding the interests of such potential participants will be
                included in the registration and proxy statement and the other
                relevant documents filed with the SEC when they become available.
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