Telecommunications-Industry Mergers (TIMs)

In the deregulated, competitive telecommunications industry, Mergers and Acquisitions (M&As) are a fact of life. Several hundreds of billions of dollars have changed hands over the six-year period from 1993 to 1999 ostensibly to improve telecommunications service, pricing, and coverage, but also to improve the market share and competitive position of the companies that are involved in these transactions.

Among the hundreds of mergers and acquisitions that occurred during this period, Bell Atlantic merged with NYNEX in 1994, and SBC had acquired Pacific Bell in 1997 and Ameritech in 1999. MCI and WorldCom merged in 1998, and AT&T acquired IBM s global network in mid-1999. Qwest and US WEST merged in 1999, as did Global Crossing and Frontier Corporation.

Mergers and acquisitions are not solely an American way of doing business. A report that was issued in June 1999 by the investment bank Broadview International notes that European telecommunications, media, and information-technology companies have launched an aggressive and unprecedented blitz of mergers and acquisitions in the United States. According to the report, European firms spent $72.8 billion on 94 acquisitions in the United States during the first half of 1999 alone, more than tripling the value of deals from the same period last year.

According to Broadview, for the first time in at least a decade, more than half of the 10 largest technology deals were carried out by European buyers among them was Germany s Siemens, France s Alcatel, and Sweden s Ericsson. So-called Internet fever...