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Verizon to acquire MCI
by
Heather B. Hayes
Virginia Business
March 2005
The
nation's largest regional phone company, Verizon Communications
Inc., plans to acquire Ashburn-based long-distance telephone
company MCI Communications Inc. in a deal initially
valued at $6.7 billion.
The merger would further consolidate the telecommunications
industry. Sprint Corp. is acquiring Reston-based Nextel
Communications Inc. and SBC Communications is acquiring
AT&T Corp., the nation’s largest long-distance
company.
Verizon beat out Qwest Communications International
in bidding for MCI. Qwest had actually made a higher
bid for MCI, but the MCI board viewed Verizon as the
stronger company financially.
Verizon sees a merger with MCI as an opportunity to
offer telephone and data services to corporate customers.
Verizon currently serves mostly small to mid-sized businesses.
The company has about 14 million residential customers
and a million corporate customers.
The merger with Verizon would cap a turbulent turn of
events for MCI. The company emerged from bankruptcy
court protection last year after the former WorldCom
nearly collapsed in an accounting scandal. It changed
its name from WorldCom to MCI and relocated its headquarters
from Mississippi to Ashburn.
The original MCI was acquired by WorldCom in 1988. MCI
was founded in Washington in 1968 as Microwave Communications
of America.
The boards of MCI and Verizon have approved the merger,
but it still must be endorsed by MCI shareholders and
government regulators. Company officials expect the
merger to be final in about a year.
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