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SBC Communications and Ameritech Corp. Merge, Acquiring 20% Stake in Bell Canada for $3.4 Billion

Strategic Insights

— 1 min read

In a major move to expand its North American operations, SBC Communications, the leading provider of local phone service in the southern and western United States, and its subsidiary Ameritech Corp., a significant investor in European phone companies, have entered into a deal to acquire a 20% stake in Bell Canada for $3.4 billion. This partnership with BCE Inc., the parent company of Bell Canada, not only fills a key gap in the combined SBC-Ameritech network but also solidifies their position as a major player in the North American market. The acquisition is a significant step in the company's plans to provide seamless service across North America.

Key Takeaways:

  • SBC Communications and Ameritech Corp. have acquired a 20% stake in Bell Canada for $3.4 billion, with the deal announced in conjunction with BCE Inc.
  • The acquisition fills a key gap in the combined SBC-Ameritech network, enabling nearly seamless service across North America.
  • The SBC-Ameritech merger, valued at $57 billion when announced in May, unites two companies controlling 57 million phone lines spread through 13 states.
  • SBC Communications, the leading provider of local phone service in the southern and western United States, already owns 10% of Mexico's largest phone company.
  • Ameritech Corp. is the biggest foreign investor in European phone companies.
  • The companies have been cleared by the Justice Department to proceed with the merger, subject to the sale of overlapping cellular operations in 17 markets.
  • As part of the deal, Bell Canada will acquire a 65% interest in BCE Mobile Communications, 21.5% of Teleglobe Inc., and a stake in six regional Canadian telecommunications companies, including AtlanticCo.
  • Three of these regional companies are merging into an entity called AtlanticCo.

Statistics:

  • The acquisition price stands at $3.4 billion for a 20% stake in Bell Canada.
  • The combined SBC-Ameritech network spans 57 million phone lines across 13 states.
  • The merger of SBC Communications and Ameritech Corp. is valued at $57 billion.
  • SBC Communications owns a 10% stake in Mexico's largest phone company.
  • Ameritech Corp. holds the biggest foreign investment in European phone companies.

Sources:

  • "Ameritech to sell stake in Bell Canada for $3.4 billion." Reuters.
  • "SBC, Ameritech to buy stakes in Mexican, Canadian companies." Chicago Tribune.

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