Abstract

SBC Communications (SBC) and American Telephone and Telegraph (AT&T) have announced they are merging to create a premier communications company with unmatched global reach. AT&T is a telecom giant with more than 100 years of history, while SBC is the number two local phone company in the US, after Verizon. The merger looks all set to dismantle the telecom industry structure and trigger further consolidation in the industry. AT&T and SBC believe that the merger will create a fully integrated telecommunications player, a company able to offer a range of telephony services to households and businesses worldwide. The annual savings projected are US$200-US$600 million by the second half of 2006, reaching US$2.4 billion to US$2.9 billion by 2009. But, analysts are expressing various concerns. Are the synergies being overestimated? Will the merger be able to create shareholder value?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• 0

Keywords

American Telephone and Telegraph (AT&T), SBC Communications (SBC), Mergers, Restructuring, Wireless business, NCR Corporation (NCR), Acquisitions, Cost savings, Synergies, Acquisitions