A European connection; more deals may follow a German-Italian phone merger
Article Abstract:
The planned merger between Deutsche Telekom A.G. and Telecom Italia points out how dramatically the business climate in Europe is changing. The surprisingly little amount of political opposition, especially in Italy, shows that Europe's governments are dropping their opposition to cross-border mergers in politically-sensitive industries, and telephone companies are among the most prized of government-controlled industries. The deal appears to indicate that the surge in new competition from foreign telecommunications firms, after Europe opened this market, is forcing these governments to accept the economic realities of business in the global marketplace. As the influence of international shareholders and global capital markets grows, European corporations will be forced to rely more on global stock and bond offerings to raise money to finance expansion. Analysts do not believe the deal will create any great savings for the merged company or allow it to fend off foreign competition, but it should give the company more purchasing power.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1999
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Psst! Want to buy a research lab? The Baby Bells want out
Article Abstract:
The seven Baby Bell companies have put the Bellcore research consortium up for sale. Bellcore was founded to provide an industry-wide research institution that would provide the seven Baby Bell member companies with standards for telecommunications products. Bellcore also manages the telephone numbers for the entire country. It has 6,000 employees and a $1 billion annual budget. The Baby Bells currently provide about 80% of the consortium's annual funds. The Baby Bells have traditionally shown solid unity on most issues affecting them. The Baby Bells want to sell Bellcore because they now view each other as potential competitors in the rapidly changing telecommunications market. They may have a difficult time finding a buyer for the research institution because it would only be worthwhile for another telecom concern to purchase the institution. AT and T is barred by federal regulations from purchasing Bellcore.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1995
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Deutsche Telekom lost more than just Telecom Italia
Article Abstract:
In its failed bid for Telecom Italia, Deutsche Telekom jeopardized its alliance with France Telecom. France Tel contends DT violated their alliance agreement by bidding unilaterally for Telecom Italia. As part of Olivetti SpA's successful takeover of Telecom Italia, Mannesmann, DT's chief rival, now acquires Omnitel Pronto Italia and Infostrada from Olivetti. Since 1998 opened German long distance markets to competitors, DT has cut prices by up to 70%, causing a 6.7% revenue decline for Q1 1999. DT plans a $10 bil stock offering to build up its acquisitions war chest.
Publication Name: The New York Times
Subject: Business, general
ISSN: 0362-4331
Year: 1999
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