AT&T has announced that it will acquire BellSouth for about $67 A billion. The long-expected move will see AT&T consolidate its position as the largest US carrier and take full control of Cingular, the fast-growing wireless joint venture. AT&T is expected to pay $37.09 per share in stock for BellSouth, or a 17.9 per cent premium over the company’s share price of $31.46. AT&T will also agree to take on about $17 billion of BellSouth debt. In 2005, BellSouth generated $3.3 billion in net income from $20.5 billion in revenue. Verizon, which will be only half of AT&T’s size in terms of market capitalisation after the transaction, is likely to come under pressure to come up with a deal. This could entail Verizon pursuing a takeover of rival Qwest or entering swift discussions with the UK’s Vodafone to take full control of Verizon Wireless, their mobile phone joint venture.
