SAN ANTONIO - SBC Communications Inc. (NYSE: SBC) today announced it has formally completed its acquisition of Ameritech, paving the way for the company to become a full-service telecommunications competitor in one of the world's fastest-growing industries.
"From the beginning, joining forces with Ameritech has been about growth and increased competition," SBC Chairman and Chief Executive Officer Edward E. Whitacre Jr. said. "Now we have the scale and the scope to compete globally, and that's exactly what we're going to do. As we move ahead, we'll continue to add jobs, create more value for shareowners and bring exciting new products to our customers.
"We are fulfilling a very clear vision today. We recognize the value of having a local presence, and that presence has been the driving force behind a growth strategy - including mergers and partnerships - that will allow us to build on our strong base of local telephone customers to meet the increasing demand for broadband, long-distance and wireless services."
Among U.S. telecommunications providers, SBC ranks first with 59 million access lines and third with 10.1 million domestic wireless subscribers. Approximately half of the companies on the Fortune 500 list have headquarters in SBC service areas. SBC is now the 14th largest employer in the United States, with more than 203,000 employees, and would rank 15th among the 1998 Fortune 500, with 1998 revenues of $46 billion.
SBC becomes the largest non-European telecommunications investor in Europe, giving it access to a $175 billion telecommunications market. Overall, SBC's strategic international investments are worth an estimated $22 billion in 22 countries in Asia, Africa, Europe and North America.
Completing the transaction also paves the way for SBC's national expansion into 30 major U.S. markets it does not currently serve. Between these 30 new markets and the regions it currently serves, SBC will offer service nationwide to 180 million people - two thirds of the U.S. population.
The combination with Ameritech marks a major milestone in the company's strategy to become a worldwide telecommunications powerhouse, offering communications services wherever customers need them. SBC will advance that strategy by expanding its data-rich, flexible network and by entering the long-distance market upon regulatory approval. "And we'll move very quickly to take our next major steps toward unleashing the full potential of this merger," Whitacre said. "We'll move forward, not in weeks or months, but in a matter of days."
Whitacre noted that the integration of Ameritech into the SBC global network also will move swiftly. "SBC has a strong, successful track record of making mergers work," he said. "We plan to extend that record as we move immediately to bring Ameritech's outstanding employee team into the new SBC, and as we include its strong operations and valuable lines of business, such as SecurityLink. We will move forward immediately to bring the many benefits of this combination to our customers and communities."
As a result of the combination, Ameritech shareowners will receive 1.316 SBC shares for each share of Ameritech they own. The transaction is a tax-free exchange and will be accounted for as a pooling of interests.
In addition to Richard C. Notebaert, chairman of Ameritech, four former Ameritech directors have joined the SBC Board of Directors: James A. Henderson, chairman and chief executive officer, Cummins Engine Company, Inc.; Lynn M. Martin, chairwoman, Council for the Advancement of Women; John B. McCoy, chairman and chief executive officer, BANK ONE CORPORATION; and Laura D'Andrea Tyson, dean, Walter A. Haas School of Business, University of California at Berkeley.
Whitacre also announced that, effective today, the company has completed the sale of 20 Ameritech Cellular properties in the Midwest to the venture of GTE and Georgetown Partners, a minority-owned firm based in Washington, D.C. The sale was a condition for the merger agreed to by SBC and Ameritech and the U.S. Justice Department, and was intended to ensure competition by eliminating all overlapping wireless properties between the two companies.
The properties that were sold include nearly 1.5 million wireless customers in Chicago, St. Louis and surrounding areas of Illinois, Indiana and Missouri. SBC and the GTE venture are cooperating to ensure a swift and easy transition for wireless customers in these areas.
Beyond the wireless subscribers affected by the sale, customers will not see immediate changes as a result of the merger, Whitacre said. "But it won't take long for everyone to see that customers are the real winners in this combination," he added. "Joining forces with Ameritech is part of our strategy to transform our company in response to the changing needs of our customers. And, as we go forward, you'll see us respond to those needs in some exciting new ways very soon."
SBC Communications Inc. (www.sbc.com) is a global communications leader. Through its trusted brands - Southwestern Bell, Ameritech, Pacific Bell, Nevada Bell, SNET and Cellular One - and world-class network, SBC provides local and long-distance phone service, wireless and data communications, paging, high-speed Internet access and messaging, cable and satellite television, security services, and telecommunications equipment, as well as directory advertising and publishing. In the United States, the company currently has 59 million access lines and 10.1 million wireless customers. Internationally, SBC has telecommunications investments in 22 countries. With more than 200,000 employees, SBC is the 14th largest employer in the U.S., with annual revenues that rank it among the largest Fortune 500 companies.
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