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Reports: SBC in talks to buy AT&T for over $15 billion
By Scarlet Pruitt

SBC Communications Inc. is reportedly in talks to buy AT&T Corp. in a deal that would create the largest phone company in the U.S. and effectively spell the end of the era of Ma Bell.

Executives from both companies have been in negotiations in recent weeks to discuss the marriage, according to an online report published in The Wall Street Journal Thursday, citing people familiar with the situation. SBC could reportedly pay more than US$15 billion for the telecom stalwart, which was known as Ma Bell before being broken up into regional carriers in 1984, according to the Journal. The talks were also reported in Thursday's New York Times.

SBC, a regional operator with headquarters in San Antonio, Texas, offers services in 13 states including California, Texas and Illinois, serving more than 54 million access lines. It also owns 60 percent of cellular carrier Cingular Wireless, with over 46 million wireless customers.

SBC has been focused on its wireless business, broadband access and, most recently, TV programming. The acquisition would allow SBC to bolster its fixed-line business and gain AT&T's valuable client list of corporate and government customers. AT&T, in Bedminster, New Jersey, has been pulling out of consumers market to concentrate on its business customers. Although it is still the U.S.'s largest long-distance carrier, it has been facing revenue declines in recent quarters making it ripe for acquisition, according to the Journal report. The companies have been in talks before without reaching a deal, but this time they are in serious negotiations around price and terms, the Journal reported. If the acquisition goes ahead, it could face significant regulatory scrutiny, the report said.

A representative for AT&T in Europe declined to comment on the report, saying the company does not respond to rumor and speculation. Representatives for SBC weren't immediately available to comment early Thursday.

Posted January 27, 2005 04:45 PM | TrackBack (3)