AT&T today offered more than $62 billion to purchase cable giant MediaOne Group.
The proposal follows on the heels of AT&T's $48-billion acquisition of another cable operator, Tele-Communications, Inc. (TCI), earlier this year.
It also overshadows a bid by Comcast for MediaOne. That cable provider offered $60 billion in March to merge the two companies into a broadband giant.
If the MediaOne deal goes through, AT&T would have a total of 26.5 million cable customers - as well as potential entry into the market for local phone service and Internet access in major markets across the country.
"Combining AT&T and MediaOne means that far more American consumers will have a choice in local phone service," said AT&T CEO C. Michael Armstrong in a letter to MediaOne. "Together, AT&T and MediaOne will bring broadband video, voice and data services to more communities, more quickly than we could separately or, in MediaOne's case, with any other company."
AT&T has offered $87.375 per share in cash and stock for a total of $58 billion. In addition, AT&T would take on MediaOne's assumed debt and preferred equity of $4.5 billion.
MediaOne refused to comment on the deal.
When AT&T's deal with TCI was approved by the FCC last February, FCC Chairman William Kennard commented that the merging of the cable and telephone companies would be "an enormous undertaking to add telephone capabilities to cable services, thus fulfilling one of the goals of the 1996 Telecommunications Act to stimulate rivalries between formerly non-competing technologies and industries."
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