Wednesday, Dec. 20, 2006

Bellsouth and AT&T

When regulators dismembered Ma Bell in 1984, they didn't predict that its seven pieces would glom back into three by 2006. The March deal that fused AT&T and BellSouth created a new telecom giant that dwarfs its two remaining rivals, Verizon and Qwest. Valued at $89 billion, the biggest deal of 2006 also included Cingular Wireless, the nation's top cell-phone provider, which had been a joint venture between AT&T and BellSouth. AT&T agreed to pay a premium to BellSouth shareholders to become the dominant carrier in 22 states and for anticipated savings of $3 billion a year by 2010. AT&T Chairman and CEO Ed Whitacre sealed the top-secret deal with Duane Ackerman, his BellSouth counterpart, while shooting birds in Georgia. The deal is currently awaiting approval by the Federal Communications Commission.