Looking to create a telecommunications behemoth that could prompt consolidation in the cable sector, AT&T Inc. said Sunday that it will acquire BellSouth Corp. for $67 billion in AT&T stock.
The move could position AT&T to deliver video, high-speed-Internet service and telephone communications to consumers over new Internet-protocol networks. The agreement also streamlines ownership of top mobile-phone carrier Cingular Wireless and its 54.1 million customers.
The landmark deal is the latest in a string of mergers led by SBC Communications Inc. CEO Ed Whitacre, who has slowly resurrected "Ma Bell," the old AT&T, which was broken up in 1984 through an agreement with the Department of Justice. That led to the creation of several regional bell operating companies, including SBC and BellSouth.
Whitacre, who will be chairman of the combined company, also led SBC's acquisition of Pacific Telesis Group in 1997, Southern New England Telecommunications Corp. in 1998 and Ameritech Corp. in 1999.
SBC adopted the AT&T brand in November after it closed on its $16 billion acquisition of AT&T.
In Sunday's announcement, AT&T said, "Consumers seeking a real alternative to cable monopolies should see faster and more economical deployment of next-generation IP-television networks and similar services as a result of AT&T's groundbreaking entry into IPTV and the unparalleled research and development work at AT&T Labs."
Verizon was the first RBOC to market a video product, FiOS TV, in several states, including Texas, California, New York and Virginia. AT&T has taken more time to develop its Project Lightspeed product, committing to spending $4 billion on a network that would deliver video, voice and high-speed Internet via an IP fiber network.