Bell Atlantic and Nynex discuss merger to form second-biggest phone firm; talks are spurred by moves to let Baby Bells enter long-distance business

Article Abstract:

Sources say that Baby Bells Bell Atlantic Corp and Nynex Corp are discussing a possible merger, which would create the second largest telecommunications concern in the US, but the merger is dependent upon the passage of the massive federal telecommunications bill pending in Congress. The telecommunications deregulation bill would allow the Baby Bells to enter the profitable long-distance market, but would also allow for competition in their local markets. Both companies were originally formed in 1984 after the breakup of the AT and T monopoly. Nynex controls the local telephone market in NY and New England, while Bell Atlantic controls areas such as NJ and Washington DC. Both areas are high-volume long-distance markets, representing about one-third of all long-distance calls. Officials at both companies contend that the merger is still in its embryonic stage.

Telecommunications

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Bell Atlantic-Nynex deal moves forward; Justice Department nod on pact may presage more industry mergers

Article Abstract:

The US Department of Justice has determined that Bell Atlantic's $23 billion acquisition of Nynex does not violate any antitrust laws and has given its approval to the deal. This decision by the Justice Department is viewed as the government giving the go-ahead to any sort of consolidations in the telecommunications industry. The deal is expected to close in May 97, and Raymond Smith, Bell Atlantic's chairman and CEO will be the combined company's CEO. The new company will have nearly 40 million phone lines, and approximately half of the long distance phone calls made will remain entirely in its territory. When the announcement was made on Apr 24, 1997, Bell Atlantic's stock dropped $1.125 and closed at $58.625. Nynex stock also fell by 12.5 cents and closed at $44.375.

COMMUNICATION, Communications, Broadcasting and Telecommunications, Laws, regulations and rules, United States. Department of Justice

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Bell Atlantic, Nynex to alter merger pact; plan calls for acquisition, not 'merger of equals,' to sidestep regulators

Article Abstract:

Bell Atlantic and Nynex are redefining the nature of their proposed merger in order to reduce the potential influence of federal regulatory bodies, making the $20.5 billion agreement appear largely as a Bell acquisition. Instead of a simple merger between relatively equal RBOCs, Bell Atlantic will exchange 345 million of its own shares for outstanding Nynex shares, thus essentially owning Nynex outright. By altering terms of the merger agreement, the two companies will reduce the number of states that must approve the pact by 50%, and Washington DC and the US Congress no longer need to approve the contract. The revised contractual structure will likely abbreviate the timetable for completion of the merger, moving the projected closure date from mid 1997 to late 1996.

Wired Telecommunications Carriers, Telephone Communications, Telephone services

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