ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, November 3, 1996 TAG: 9611040078
SECTION: NATIONAL/INTERNATIONAL PAGE: A-9 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
British Telecommunications has agreed to buy MCI Communications for as much as $21 billion in what will be the biggest foreign purchase ever of a U.S. company.
The boards of both companies agreed Saturday on the deal, a cash and stock transaction worth between $36 and $38 a share, said sources speaking on condition of anonymity. A formal announcement of the merger is to be made at news conferences today.
A combined British Telecom and MCI would provide a powerful competitor to AT&T Corp., the world's largest long-distance company. It would have combined revenue of $35 billion and two marquee brand names with operations in more than 70 countries.
MCI, the nation's No.2 long-distance company, would continue to operate under its name and keep a headquarters in Washington. British Telecommunications PLC is based in London. No further details of the combination were available.
Word of the mammoth deal, one of the largest mergers ever during a year when multibillion dollar mergers have been coming at a frenzied pace, first emerged Friday when MCI disclosed it was talking to the British phone giant.
In fact, the two have been in discussions of one sort or another since 1994, when British Telecom bought a 20 percent stake in MCI.
The British Telecom purchase is for the remaining 80 percent of MCI's shares.
The merger would by far be the biggest foreign takeover of a U.S. company and mark the end of independence for MCI.
An MCI-British Telecommunications marriage also would radically reorder the landscape of phone service providers in the months since Congress enacted a sweeping deregulation that allows long-distance companies to compete with local phone companies and vice versa.
LENGTH: Short : 43 linesby CNB