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Verizon to Buy MCIPOSTED February 14, 2005 Verizon Communications, the nation's largest telecommunications company, has agreed to buy long-distance carrier MCI in a deal worth $6.7 billion. Verizon will pay $4.8 billion in stock and $488 million in cash. In addition, MCI will pay its shareowners quarterly and special dividends of $4.50 per share, worth $1.463 billion. This includes a 40-cent-per-share quarterly dividend approved by the MCI Board on Friday, Feb 11. The transaction adds new strength to the telecommunications services both companies provide. It ensures that consumers and businesses will have a supplier with the financial strength to maintain and improve MCI's Internet backbone network, which is the largest in the world based on company-owned points of presence. The transaction will also mean better service for Enterprise customers by enhancing Verizon's ability to compete for and serve large-business and government customers with a complete range of services, including wireless and the most sophisticated IP (Internet Protocol) based services. The deal comes just weeks after SBC Communications said it would acquire one-time long distance giant AT&T. "This is the right deal at the right time," said Verizon Chairman and CEO Ivan Seidenberg. "We have been evaluating a transaction with MCI for some time, and now we have the opportunity to reach an agreement at the right price that works for both companies and at a time when MCI is gaining momentum. It is a natural and logical extension of Verizon's strategy to transform our company to serve growth markets and offer broadband technologies." "With our heritage of innovation, global network and world-class Enterprise capabilities, MCI is the right partner for Verizon," said Michael Capellas, MCI President and CEO. "Combined with Verizon's financial strength and record of operational excellence, we will accelerate delivery of next-generation services, broaden our product portfolio and better serve our customers." Verizon will likely cut 7,000 jobs at MCI once the merger
is completed to reduce expenses
and overlapping jobs. Verizon currently employs 210,000 workers
while MCI has 69,100. |
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