Former Bells merge

May 1, 1996

Former Bells merge

SBC Communications Inc. (formerly Southwestern Bell) has acquired Pacific Telesis Group (formerly Pacific Bell) in a $16.7 billion move. This first union of former Bell operating companies creates the nation`s second-largest telecommunications company and has sparked rumors of mergers among the remaining Bell operating companies.

This merger will serve the nation`s two most populous states--California and Texas--seven of the country`s 10 largest metropolitan areas and 16 of the top 50 telecommunications markets. The companies employ more than 30 million access lines in high growth areas and have access to more than 80 million potential wireless customers across the country.

The new company will be known as SBC Communications Inc. and will be based in San Antonio, TX, with Edward E. Whitacre, Jr. serving as chairman of the board and chief executive.

In the view of Roy Neel, president and chief executive of the United States Telephone Association, Washington, DC, "The merger between SBC Communications and Pacific Telesis is a marriage of two similar and complementary corporate cultures that is certain to create a strong competitor for such megacompanies as AT&T. This is a reasonable and healthy response to the onslaught of competition entering the local loop created by the new telecommunications law."

The parties hope to complete the transaction by the end of the year. It must be approved by the California Public Utilities Commission, the U.S. Department of Justice, and the Federal Communications Commission.

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