AT&T vs. BellSouth Merger

Paper Summary:

The paper provides a profile of the AT&T company and the BellSouth Corporation and then explains the regulatory clearance process before a merger can go through. The paper discusses the proposed benefits of the takeover and the new company leadership. The paper reveals that figures from the year 2007 already show that AT&T's revenues nearly doubled but points out that we can not know that the takeover of the BellSouth Inc. created value because an observation period of less than one year is not long enough. The paper notes the possible failures in this takeover.

Outline:
Company Profiles
Merger-Approval Milestones
The Announcement - 5th March 2006
Final approval by the FCC
New Company Leadership
Conclusion

From the Paper:

"AT&T Inc. (American Telephone & Telegraph) is the largest communications holding company in the USA - and also worldwide - in reference to revenue. It can be seen as the largest provider of local and long distance telephone services, high-speed wireless and DSL Internet access in the United States.
"The company was founded in 1883 as Southwestern Bell Corporation in St. Louis. After its acquisition of the American Telephone & Telegraph Company, it changed its name to AT&T and moved its headquarters to San Antonio, Texas.
"In 2006 there were about 303,900 employees working at AT&T. The company is listed on the NYSE , the company has around 3.3 billions shares outstanding and the closing price on 24th December 2007 was $41.50. Institutional and Mutual Fund Owners hold about 61% of the outstanding shares, and insiders only hold 0.06%. The biggest Institutional owner is the Capital Research & Management Company, the biggest Mutual Fund Owner the Investment Company of America."

Sample of Sources Used:

• Morck, Shleifer and Vishny (1988): "Characteristics Of Targets Of Hostile And Friendly Takeovers", University of Chicago Press, p 101-136
• Martin, McConnell (1991): "Corporate Performance, Corporate Takeovers and Management Turnover", Journal of Finance 46, p 671-688
• Healy, Palepu and Ruback (1992): "Does Corporate Performance Improve After Mergers?", Journal of Financial Economics 31, p. 135-176
• Pavel G. Savor (2006): "Do Stock Mergers Create Value for Acquirers?", University of Pennsylvania, SSRN Working Paper Series
• Gugler, K., Mueller, D. C. ,Yurtoglu, B. and Zulehner, C. (2003), "The Effects of Mergers: An International Comparison", International Journal of Industrial Organization, Vol. 21, No. 5, pp. 625-653

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• Business Plan # 84654 : "AT&T: Twenty Years of Change"

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