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Causes of the AT&T-BellSouth Takeover - Essay Example
Author : legrosadelia
Finance & Accounting
Pages 4 (1004 words)
AT&T INC-BELLSOUTH TAKOVER Name Instructor Date Causes of the At&T-Bellsouth Takeover According to Maney (2006), AT&T-BellSouth merger was a result of weakness and not a strategy of consolidating the strength of the two companies. Maney (2006) explains that in days leading to the merger the CEO of BellSouth came to their offices and spoke of how the company was experiencing many problems in the market…
Consequently, the revenues of the company were falling, stock process declining and incurred huge cost price. Things looked even bleaker given the coming of internet phone calls and more serious competition from cable and wireless companies. AT&T, which is a holding company agreed to take-over BellSouth as a strategy to position it as a company committed in enhancing convergence, progressive innovation and competition in the communication and entertainment industry (Reardon, 2006). The take-over guaranteed AT&T Inc the rights to own and manage Cingular Wireless which is a leading provider of wireless data and voice services (Reardon, 2006). Moreover, AT&T would have the exclusive rights on ownership of YellowPages.Com which offer Yellow Pages and local search site. Reardon (2006) asserts that the AT&T-BellSouth takeover would help AT&T company cut down its labor by 10,000 jobs between 2007 and 2009. AT&T also hoped to increase its revenues and customer to about $ 130 billion in sales and 70 million customers by increasing its market niche from the previously 13 states to 22 states following the acquisition of the 9 southeast states previously served by BellSouth. ...