AT&T and British Telecom Abandon Business Service Merger Plans

British Telecom and its US counterpart AT&T have ended their plans to merge their business service units, according to sources close to the two companies. The news comes as AT&T is set to announce a major restructuring of its business divisions, breaking it down into four separate units in an effort to boost its share price. The merger plans, first announced in September, were reportedly abandoned due to concerns about creating a singular slimmed-down future. Both companies will continue to cooperate in their existing joint ventures, including Concert and Advance.

Key Takeaways:

• AT&T and British Telecom have canceled their plans to merge their business service units, citing concerns about creating a singular slimmed-down future.
• AT&T is set to announce a major restructuring of its business divisions, breaking it down into four separate units to boost its share price.
• The merger plans were first announced in September, but were abandoned due to concerns about the impact on customers and the company's overall strategy.
• Both companies will continue to cooperate in their existing joint ventures, including Concert and Advance.
• AT&T's restructuring announcement comes amid criticism from analysts, who have questioned the company's direction and strategy.
• BT has faced criticism for its sprawling and unmanageable structure, with Goldman Sachs describing it as a "sprawling and unmanageable group".
• BT's debt is expected to reach $28.6 billion by March next year, according to Goldman Sachs' analysis.
• Other telecom sector experts have criticized BT's lack of clear strategy and direction, which has worried investors.

Statistics:

• $28.6 billion: The amount of debt BT is expected to reach by March next year, according to Goldman Sachs' analysis.
• 4: The number of separate business units AT&T will break down into, according to the company's expected restructuring announcement.
• 9 months: The amount of time since AT&T first announced its merger plans with BT in September.
• $1.7 billion: The amount of the "fine" threatened by the Italian government against the BT-led consortium Blu for its withdrawal from the auction for Italian mobile phone licences.

Sources:

• Goldman Sachs research report entitled "Break-up Beckons"
• City analysts Robertson Stephens' comments on BT's lack of direction
• News reports citing sources close to AT&T and British Telecom.