MCI, Sprint Talk Merger
MCI, the nation’s second largest-, and Sprint, the nation’s third largest-long-distance carrier, are talking about a merger that would result in a mega long distance company. Though, it’s not a done deal by a long shot.
Sprint is very attractive to MCI Worldcom because along with long distance, Sprint brings a wireless component to the deal. Combined, the company is valued at $73 billion – less than half of MCI’s valuation of $151 billion.
Reports indicate that the new financial structure would trade Sprint stock for a new WorldCom stock. This would allow MCI to keep Sprint’s wireless business separate from the long distance side. Apparently, the still-growing wireless business can wreak havoc on the financials.
Industry observers don’t think regulators will block a merger (combined the companies will represent 30 percent of the industry while AT&T has 60 percent of the marketshare); however, Sprint’s ongoing struggle with it’s Global One partners could. France Telecom SA and Deutsche Telekom AG both hold 10 percent of Sprint and that’s enough to undo the deal.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.