ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, October 1, 1996 TAG: 9610010078
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
AT&T Corp., arming itself against competition in the telecommunications industry, on Monday completed the spinoff of its equipment division in the broadest stock distribution ever.
AT&T sent 525 million shares in Lucent Technologies, the newly spun-off company, to the 3.3 million people who own AT&T stock, the nation's most widely held.
The massive breakup creates a $21.4 billion high-technology giant specializing in phone equipment and intensifies the race to exploit looming changes in federal telecommunications rules. Lucent, based in Murray Hill, N.J., starts out as the 35th largest U.S. company and includes Bell Labs, AT&T's venerable research and development arm.
Like other long-distance companies, AT&T wants to expand into local phone services to take advantage of the Federal Telecommunications Act of 1996, which removes competitive barriers between telephone, cable and other communications companies.
The spinoff completes the first step in AT&T's split into three separate companies, rivaling the breakup of Ma Bell in 1984, when it spun off the Baby Bells. AT&T is ejecting its computer manufacturing unit, NCR Corp., late this year.
``It gets AT&T to concentrate on what they do best,'' said Stephen Shook, a telecommunications analyst at Interstate-Johnson Lane in Charlotte, N.C. ``They will be more purely a telecommunications provider.''
AT&T's telephone equipment arm was hurt by its association with AT&T when it tried to sell products to AT&T rivals. The spinoff will not only free Lucent to sell more products, it could also save AT&T money by freeing it to buy products, at possibly lower prices, from Lucent's rivals.
``This is one of the fundamental rationales behind the whole spinoff - to eliminate the strategic conflict between phone companies and AT&T,'' said Bill O'Shea, Lucent's president of international regions.
LENGTH: Short : 44 linesby CNB