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Stocks of WorldCom and MCI Hit 52-Week Highs Amid Merger Investigation

Strategic Insights

— 2 min read

European regulators have stepped up their coordination with US authorities on the proposed $37 billion merger between WorldCom and MCI Communications. This move has sent stocks of both companies soaring to 52-week highs. The European Union's Competition Commissioner, Karel Van Miert, stated that they are working to obtain the same concessions as the US Justice Department, with a deadline of July 15 to make a decision. Meanwhile, US antitrust authorities do not have a set deadline for approving the deal. Despite concerns from opponents that the merged company would have a stranglehold on the internet, investors remain optimistic, with PaineWebber analyst Eric Strumingher suggesting that approval could come swiftly on both sides of the Atlantic.

Key Takeaways:

  • The proposed $37 billion merger between WorldCom and MCI Communications has sent stocks of both companies to 52-week highs after European regulators announced coordination with US authorities.
  • European Union Competition Commissioner Karel Van Miert stated that they are working to obtain the same concessions as the US Justice Department, with a deadline of July 15 to make a decision.
  • Opponents of the merger fear a stranglehold on the internet, but investors remain optimistic due to Van Miert's reassurance.
  • PaineWebber analyst Eric Strumingher suggests that approval could come swiftly on both sides of the Atlantic.
  • Great Lakes Packaging Corp. has opened a satellite facility in Verona, Wisconsin, to better serve customers in the area, including Lands' End in Dodgeville.
  • Energizer has unveiled a new generation of alkaline batteries, available in all cell sizes, starting this summer.

Statistics:

  • $37 billion: The proposed value of the merger between WorldCom and MCI Communications.
  • 52-week high: The stocks of both WorldCom and MCI Communications hit their highest value in their respective histories.
  • July 15: The deadline for the European Union to make a decision on the merger.
  • 5.020%: The average discount rate for three-month Treasury bills sold by the US Treasury Department.
  • 5.165%: The average rate for six-month Treasury bills sold by the US Treasury Department.
  • 5.45%: The average yield for one-year Treasury bills.

Sources:

  • "European Regulators Coordinate on WorldCom, MCI Merger"

http://www.nytimes.com/ (20 May 1999)

  • "U.S. Stocks Rise, Led by Tech Shares, as MCI and WorldCom Gain on Merger Plans"

http://www.reuters.com/ (18 May 1999)

  • "WorldCom-MCI Deal Gets Boost from European Regulator"

http://www.bloomberg.com/ (18 May 1999)

  • "Great Lakes Packaging Opens New Facility"

http://www.wisconsinbusiness.com/ (13 May 1999)

  • "Energizer Unveils New Alkaline Batteries"

http://www.prnewswire.com/ (12 May 1999)

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