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Technology / AI and automation

AGONY FOR WORLDCOM AS OFFICIALS CHEW OVER MCI DEAL

WorldCom Inc now faces an agonizing wait of between six months and a year as the US Justice department pores over its proposed merger with MCI Communications Corp. The delay, inevitable because of the size and significance of its merger, is fraught with dangers. Because of the dominance of the two companies in the internet transmission business – which is sensitive politically – the deal is unlikely to be nodded through and some analysts are already predicting the merged company may have to relinquish some of its interests if the deal is to win approval. Any delay will be a nerve-wracking experience for WorldCom because its all share offer is vulnerable to market fluctuations. And GTE Corp, whose cash offer was topped by WorldCom is not out of the picture and has refused to rule out a new bid to thwart WorldCom’s $37m offer. The one company totally blown out is British Telecommunications Plc which is taking its money and seems likely to run to offer a chunk of it back to shareholders. Officially BT says it has not ruled out an acquisition in the US and is now likely to start talks with possible partners. BT says it will buy back MCI’s 24.9% stake in its Concert international alliance when the WorldCom deal is approved – although MCI WorldCom will market its services to international companies on a non-exclusive basis in the US. An immediate problem for BT is its relationship with Spanish carrier Telefonica de Espana which had been looking for support from BT/MCI in its efforts to break into the South American market. Now it may have to choose between a future with BT and one with WorldCom MCI – with the rejected partner as a competitor.

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CBR Staff Writer

CBR Online legacy content.