Merger poses a bold challenge to Bells; WorldCom, MFS confirm $12.4 billion accord, a risky and costly step

Article Abstract:

In a move that is expected to challenge the Baby Bells' share of the local telephone services market, WorldCom Inc is planning to acquire MFS Communications Co. The stock swap is valued at $12.4 billion, a price that has raised a certain amount of concern on the part of industry observers. The view on Wall Street emphasizes the fact that the stock swap amounts to a premium price of more than 60 percent of the recent market value of MFS. WorldCom's stock price fell 14 percent to $22.75 following the announcement. The two companies are a good match, and will be able to combine their resources in such a way as to offer one-stop shopping for a range of services including local and long distance telephone service and access to the Internet. MFS Chmn James Q. Crowe predicted that the deal would pay for itself within five years of operation.

Wired Telecommunications Carriers, Telephone Communications, Telephone services, Long distance telephone services, Growth, Local telephone services, Long-distance telephone service, MCI Inc., Company growth, Local telephone service, MFST, MFS Communications Company Inc., WCON

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Lucent agrees to buy Yurie for $1 billion: deal would boost business in data networking; 3rd-period charge seen

Article Abstract:

Lucent Technologies acquired data-equipment manufacturer Yurie Systems for $1 billion, or $35 a share. Yurie, despite its 1997 annual revenue of $51 million, has positioned itself well in the growing need for ATM switches. The deal will help Lucent catch up with aggressive data-networking suppliers such as Cisco Systems in the race to develop public-communications networks that can meet demand for high-speed data transmission and Internet access. Annual sales of ATM switches will leap from $100 million in 1998 to $600 million in 2000, according to Lucent's Data Network Systems Group. The acquisition of Yurie would trigger a one-time charge for 3rd qtr 1998 earnings, as well as a 'slight' dilution of its 1999 earnings, according to Lucent.

Telecommunications, Lucent Technologies Inc., LU, Yurie Systems Inc., YURI

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