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Cable & Wireless Acquires MCI's Internet Business for $2 Billion

Strategic Insights

— 2 min read

Cable & Wireless has successfully secured a deal to purchase MCI's entire Internet business for a staggering $2 billion, which is approximately £1.22 billion. This acquisition marks a significant milestone for C&W as it expands its roster of transatlantic clients, including residential and business customers. The deal also includes technical equipment such as cable routers, which C&W had previously agreed to purchase for $625 million. This acquisition is expected to finalize the $40 billion merger between MCI and WorldCom, with BT receiving $7 billion for its 20% stake in MCI. The shares of C&W rose by 22p to 810p following the announcement.

Key Takeaways:

  • Cable & Wireless (C&W) has acquired MCI's entire Internet business for $2 billion, which includes the purchase of technical equipment such as cable routers for $625 million.
  • The acquisition adds MCI's list of residential and business customers to C&W's existing roster of transatlantic clients.
  • The deal includes the purchase of MCI's technical equipment, including cable routers, which C&W had previously agreed to buy for $625 million.
  • The acquisition is expected to finalize the $40 billion merger between MCI and WorldCom, with BT receiving $7 billion for its 20% stake in MCI.
  • The US Justice Department and the European Commission insisted on the sale of MCI's Internet business to prevent the new telecoms group from dominating the Internet market.
  • Rivals claimed that MCI-WorldCom would operate more than half of international Internet traffic, with WorldCom's UUNet being the largest internet service provider.
  • Under the terms of the agreement, MCI is not allowed to lure old customers back from C&W, in line with the EU-approved merger earlier this month.

Statistics:

  • Cable & Wireless (C&W) purchased MCI's Internet business for $2 billion (approximately £1.22 billion).
  • The deal includes the purchase of technical equipment such as cable routers for $625 million.
  • BT is set to receive $7 billion for its 20% stake in MCI as part of the $40 billion merger.
  • The shares of C&W rose by 22p to 810p following the announcement.
  • MCI's list of residential and business customers is expected to add to C&W's existing roster of transatlantic clients.
  • The US Justice Department and the European Commission insisted on the sale of MCI's Internet business to prevent the new telecoms group from dominating the Internet market.

Sources:

  • The Times, "Cable & Wireless to buy MCI internet business", 1998
  • C&W press release, "Cable & Wireless Acquires MCI's Internet Business for $2 Billion"

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