MCI wins Sprint bid

Electronics Times, Oct 11, 1999

Number two US long-distance telephone company MCI Worldcom appears to have won the bidding war for number three carrier Sprint, in what is thought to be the largest merger in history, while France Telecom has broken into the German mobile market.

Board members at Sprint, the third largest US long-distance company, decided to accept MCI's bid on Monday, despite a last-minute competitive offer from rival bidder BellSouth, which operates in the south eastern states.

MCI has offered $115bn in stock, a significant increase on an earlier bid of $65bn in stock, itself one of the largest deals ever. It will pay $76 in stock for each Sprint share. The combined company will be called WorldCom, with a revenue of $50bn.

William Esrey, Sprint chairman and CEO, will become WorldCom chairman and Bernard Ebbers, MCI Worldcom president and CEO, will become president and CEO of WorldCom.

Ebbers says he plans to ditch the Global One alliance between Sprint, France Telecom and Deutsche Telekom and pursue expansion into Europe alone.

Meanwhile, Vodafone Airtouch has agreed to sell its 17.24% stake in E- Plus Mobilfunk, the third largest German cellular network operator, to France Telecom. France Telecom is to buy the stake for DM3.42bn (#1.14bn) in cash. Vodafone says the money will be used for corporate purposes.

Vodafone announced in May that it intended to divest in E-Plus, in accordance with an undertaking it gave to the European Commission in connection with its merger with AirTouch Communications - AirTouch held a 35% stake in Mannesmann Mobilfunk, the operator of D2, the largest German mobile network.

France Telecom is thought to have agreed the purchase in an attempt to compete directly with Global One equity partner Deutsche Telekom's mobile arm T-Mobil. The deal is considered representative of a deteriorating relationship following its unsuccessful attempt to acquire Telecom Italia without prior notice.