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Re: [coldwarcomms] SBC buying AT&T

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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 1 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      outdated plant.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


      "As you ramble through life, brother, no matter what your goal,
      keep your eye upon the doughnut, and not upon the hole"
      --Dr. Murray Banks, quoting a menu
      Daryl R. Gibson, MCSE
      Office: (801)422-2950 Cell: (801)367-4341
      Home: (702)734-6153, Utah Residence: (801)802-6348
    • 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 2 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

        · 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.


        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

        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

        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.


        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

        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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