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AT&T Emerges Victorious in MediaOne Takeover

Strategic Insights

— 2 min read

AT&T Corp. has successfully outbid Comcast Corp. for MediaOne, the nation's fourth-largest cable TV company, in a high-stakes takeover battle that will give AT&T control of the largest cable provider in metro Atlanta. The deal, valued at nearly $62 billion, makes AT&T the nation's largest cable television provider. However, to ease the sting of defeat, AT&T and Comcast have agreed to an exchange of cable systems that could result in Comcast gaining up to 2 million of AT&T's cable subscribers at a cost of up to $9.2 billion.

Key Takeaways:

  • AT&T will acquire MediaOne, the nation's fourth-largest cable TV company, in a deal valued at nearly $62 billion.
  • Comcast will receive an exchange of cable systems from AT&T, which could result in Comcast gaining up to 2 million subscribers at a cost of up to $9.2 billion.
  • The deal includes a provision for Comcast to offer AT&T-branded products to its cable subscribers.
  • Comcast will receive a $1.5 billion breakup fee for abandoning the MediaOne agreement.
  • The AT&T-MediaOne deal and the AT&T-Comcast deal still require shareholder and regulatory approval.
  • The two companies will continue to do business with each other, with Comcast agreeing to offer AT&T-branded products to its cable subscribers.
  • AT&T plans to use cable wires to deliver local and long-distance phone service, high-speed Internet access, and interactive entertainment to millions of U.S. homes.
  • The acquisition makes AT&T the nation's largest cable television provider, with over 8 million subscribers.

Statistics:

  • The deal is valued at nearly $62 billion.
  • Comcast will gain up to 2 million AT&T cable subscribers.
  • The exchange of cable systems will cost Comcast up to $9.2 billion.
  • Comcast will receive a $1.5 billion breakup fee for abandoning the MediaOne agreement.
  • The AT&T-MediaOne deal will give AT&T control of 60% of American homes with cable.
  • MediaOne has 2.25 million subscribers.
  • Lenfest Communications Inc. has 1.5 million subscribers in Greater Philadelphia.

Sources:

  • "AT&T to Acquire MediaOne for $62 Billion" - The New York Times
  • "Comcast, AT&T Agree to Exchange Cable Systems" - Bloomberg
  • "Lenfest Communications to Be Acquired by AT&T" - The Wall Street Journal
  • "MediaOne Abandons Deal with Comcast" - CNN Money
  • "MCI WorldCom, Microsoft, America Online Reportedly Interested in MediaOne Deal" - The Washington Post

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