Friday, July 14, 2006

Tracking the AT&T-BellSouth deal

According to recent reports, reviewed in the Chicago Tribune, The AT&T/BellSouth merger might not go as smoothly as planned.
Judicial review of the takeover of AT&T Corp. last year by SBC Communications Inc. and Verizon Communications Inc.'s acquisition of MCI Corp. has raised questions about whether the Justice Department and the Federal Communications Commission acted in the public interest by approving the two mergers.

U.S. District Judge Emmet Sullivan said he might need more evidence before signing off on the consent decrees that approved last year's mergers.

While few expect Sullivan might try to unwind the mergers, they said his review has already embarrassed the department and the FCC, which will likely cause both agencies to provide greater scrutiny to the proposed AT&T-BellSouth deal.

"The FCC and DOJ are on notice there'll be more public scrutiny of how they handle BellSouth," said Daniel Berninger, an analyst with Tier1 Research.
The share prices of both AT&T and BellSouth have dropped.

What does all this mean for Lafayette? It's hard to say. But the idea that the merger is not an absolutely done deal is pretty new.


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