BellSouth shareholders OK sale to AT&T
By Harry R. Weber, AP Business Writer
Rocky Mountain News
Friday, July 21, 2006
ATLANTA (AP) -- BellSouth
Corp. shareholders approved Friday the proposed sale of
their company to AT&T Inc. for $67 billion in stock, a deal
that would expand the reach of the nation's largest
telecommunications provider and put the two companies'
wireless joint venture under one roof.
The vote during a special meeting in Atlanta was 97 percent
in favor of the deal, which was announced March 5 and is
expected to close by the end of the year.
AT&T shareholders were scheduled to vote later Friday in San
Antonio on whether to issue new stock in the combined
Federal and state regulators also must approve the deal.
"Our cultures are a good fit," BellSouth Chief Executive
Duane Ackerman told shareholders.
In papers filed with the government, AT&T and BellSouth have
said that allowing the parent companies of Atlanta-based
Cingular Wireless LLC to merge will help eliminate
challenges they now face in managing the nation's largest
cell phone provider.
In their FCC application, the companies said Cingular has
been successful, but increasingly faces challenges from its
management structure. San Antonio-based AT&T owns a 60
percent stake, and Atlanta-based BellSouth the rest.
The merger also would provide efficiencies for the combined
company, AT&T and BellSouth have said.
A day after the deal was announced, AT&T said it plans to
cut up to 10,000 jobs, mostly through normal turnover, if
its purchase of BellSouth is approved. The work force
reduction would take place over three years. Before the
cuts, the combined company would have around 317,000
employees, including Cingular.
During Friday's BellSouth meeting, which lasted about 30
minutes, some shareholders questioned how the deal will
affect employee benefits and the future of Cingular.
Ackerman said Cingular's headquarters will remain in Atlanta
for at least five years. Beyond that, AT&T has not made any
plans to move the headquarters, though there can be no
guarantees, Ackerman said.
"It's impossible to commit a future board to exactly what
they will do forever," Ackerman said,
Once the deal is completed, the BellSouth and Cingular names
will be phased out.
Ackerman also was asked why the proxy statement on the deal
did not mention the potential liability AT&T may face with a
pending multibillion dollar lawsuit over allegations some
major phone companies gave customer data to the National
Ackerman said it was an issue of timing, and that the
information was contained in regulatory filings made by
AT&T. He declined to comment on the lawsuit, citing
national security concerns.
The merged company would have 70 million local-line phone
customers, 54.1 million wireless subscribers and nearly 10
million broadband subscribers in the 22 states where they
AT&T was formed by SBC's acquisition of AT&T Corp. in
November. The deal added a substantial national reach to
the former Southwestern Bell's local business, which is
concentrated in 13 states, including Texas, California, and
the Midwest. BellSouth is the dominant local telephone
provider in nine Southeastern states.
AT&T will pay 1.325 of its own shares for each BellSouth