Canadian, U.S. carriers to merge

Canadian intercontinental telecommunications company Teleglobe Inc. and Excel Communications Inc., the fifth-largest long-distance carrier in the U.S. have agreed to merge, the companies announced yesterday.

The merged company will have a combined market capitalization of $7 billion. The merger, if approved, will make Teleglobe the fourth-largest long-distance company in North America, the companies said in a statement issued yesterday. The new company will go by the name Teleglobe Inc. and will have headquarters in Montreal.

Teleglobe currently has a large U.S. network and Excel has retail distribution channels. The companies said in a statement that the merger will allow them to offer services to homes, businesses, carriers and Internet service providers (ISPs) worldwide.

"This merger unlocks value for shareholders of both companies," commented Charles Sirois, chairman and CEO of Teleglobe, in a statement. "Combining Teleglobe's global reach and its portfolio of products and services with Excel's marketing savvy and its proven distribution system is a perfect fit that satisfies each company's greatest strategic needs."

The boards of both companies have approved the deal, but shareholders and regulatory agencies in the U.S. and Canada must still approve the merger before it can go ahead.