Cingular acquires AT&T Wireless

[ragingfish]

Cingular acquires AT&T Wireless for 41 billion dollars Tue Feb 17, 6:55 PM ET Add Top Stories - AFP to My Yahoo! ATLANTA, United States (AFP) - Cingular Wireless won a bidding war for AT&T Wireless with a staggering 41-billion-dollar offer, which would make it America's top mobile service provider. The final bid -- the highest all-cash bid ever made in the United States, according to AT&T Wireless spokesman David Caouette -- left investors and credit assessors worried. The price was too rich for the only other bidder, British giant Vodafone, already suffering on London's stock exchange as investors sweated over reports it had offered 38 billion dollars. "It's a very full price for a business with falling subscriber numbers and profits," said Julian Hewett, telecommunications analyst for the European consultancy firm Ovum. "If Vodafone's game was to drive up the price, then it's certainly succeeded." At 15 dollars a share, the offer for AT&T Wireless was 36.5 percent above its closing price on January 21, the day before the second US wireless telecoms company was effectively placed on the block. Major credit rating agencies New York-based Moody's Investors Service and Standard and Poor's warned they may downgrade Cingular Wireless and its parents because of an expected increase in debt to pay for the deal. Cingular's parents are SBC Communications, which owns 60 percent, and BellSouth Corp., which owns 40 percent. SBC shares fell 21 cents or 0.84 percent to 24.66 dollars and BellSouth dropped 49 cents or 1.66 percent to 29.06 dollars. Vodafone shareholders, meanwhile, heaved a sigh of relief that they were out of the race, sending the British giant's shares up 6.2 percent to 140.75 pence in London. Cingular, now the number-three US wireless carrier, aimed to complete the deal at the end of 2004 providing it leaps regulatory hurdles and wins shareholders' approval. Together, Cingular and AT&T Wireless, currently the number two provider, would create an entity with 46 million customers and sales of more than 32 billion dollars, based on the firms' 2003 performance. That would eclipse current US leader Verizon Wireless, which has about 36 million customers. Cingular president and chief executive Stan Sigman said the companies could find synergies worth one billion dollars in 2006 and then two billion dollars annually from 2007. He said he was "very comfortable" that savings through synergies between the two companies would cover the huge premium in the price. Some of the synergies would be found by eliminating jobs. "Yes, there will be employees that are affected by this," Sigman told a telephone news conference. The number of workers affected was not yet known, he said. AT&T Wireless chairman and chief executive John Zeglis said he would depart his post once the deal was wrapped up, leaving Sigman as the chief executive. "We do not need two CEOs; that is a key synergy here. One desk, one salary, one CEO," he said. "I will only stay for whatever transition help that Stan (Sigman) might need me for." Japan's top mobile phone carrier, NTT DoCoMo Inc, planned to withdraw from the US mobile market and sell its 16 percent stake in AT&T Wireless to Cingular, the Kyodo news agency reported. The deal left British giant Vodafone apparently stuck with a big stake in Verizon Wireless that it wanted to dump. "Clearly, we had a serious look at AT&T Wireless," a Vodafone spokesman said. "This was an opportunity for creating shareholder value. But there becomes a price at which point it no longer stacks up," he added. One factor complicating any takeover by Vodafone was the British operator's 44.4 percent stake in Verizon Wireless. Vodafone is thought to be unsatisfied with the minority stake in Verizon, which has its own branding and uses a different mobile technology to Vodafone. "Attention will now turn to France, where the period during which Vodafone was not allowed to bid for the whole of (French mobile firm) SFR has recently expired," said Ovum's Hewett.

[ragingfish]

All I can say is AMEN, because AT&T wireless is horrible, and I'm outraged I'm locked into a contract with them.

[Stang2Vibe]

This is coming on the heels of the offer that Disney rejected from Comcast to buy Disney. Disney said today that it would consider a higher offer, though.

[ragingfish]

This is relatively old news, I've been hearing rumours for at least a month or two -- hoping this improves their service enough so my last year or more of contract time isn't aggrevating. Was considering switching to cingular when i'm finally able to, but i guess i'll see how things stand in a year or two...

[AKLGT]

cellular one bought out the alaska at&t business. the changeover took place about 2 mos ago and it's a mess! the service sucks, dropped calls, no voicemails, etc!

[ragingfish]

Cell one ain't cingular thankfully...at least not over on this side of the land...

[Stang2Vibe]

I have Verizon now and I have very little problems. Used to have AT&T and they were OK, but their coverage sucked.

[ShotInTheDark]

actually, cell one just traded eastern maryland to cingular for a piece of the market in michigan. everything east of the bay bridge is now cingular the takeover is effective tommorow.

[ragingfish]

Quote, originally posted by Stang2Vibe »I have Verizon now and I have very little problems. Used to have AT&T and they were OK, but their coverage sucked.in central NJ, verizon blows chunks!cingular has, by far, the best coverage here (which unfortunately, i learned the hard way)

[Stang2Vibe]

My stepdad has sprint and it stinks. AT&T's coverage sucked. Cingular is just about unheard of here. Verizon is by far the largest here and is the largest in the country. But they probably do suck in some parts of the country.

[rainvibe]

ATT has pretty good coverage here in Pac NW, and I have had good service from them. just a few more months on the contract and then we will see what there is to chose from.

[Reynoma]

Quote, originally posted by ragingfish »in central NJ, verizon blows chunks!cingular has, by far, the best coverage here (which unfortunately, i learned the hard way)In contrast, in southern NJ, Cingular's coverage has much to be desired. I've been thinking about switching to Verizon, but I cannot even come close to the current deal I have with Cingular (1000 anytime minutes per month for 2 lines with rollover for $70/month). I've accumulated over 5,500 rollover minutes.

[ragingfish]

Oh yeah, I forgot all about rollover! That's pretty sweet...