Cingular wins bid for AT&T Wireless

IDG News Service - Cingular Wireless announced today that it has agreed to buy AT&T Wireless Services Inc. for about $41 billion, or $15 per share.
The deal, which still requires standard approval from AT&T Wireless shareholders and federal regulatory authorities, would create the largest company in the U.S. wireless market, with 46 million customers, Cingular said. The deal is expected to be finalized by the end of the year, Cingular said.
The deal was signed in New York around 2 a.m. after a weekend of bidding and counterbidding between Cingular and Vodafone Group PLC, according to U.S. media reports.
Vodafone Group PLC, Europe's largest mobile phone company, said it withdrew from the bidding after it "concluded that it was no longer in its shareholders' best interests to continue discussions." The company, based in Newbury, England, said it remains committed to its current partnership in Verizon Wireless, the dominant operator in the U.S. wireless market.
Vodafone owns a 45% share of Verizon Wireless in a partnership that is now four years old. Verizon Communications owns a controlling interest in the mobile phone company.
"It really is a fairly simple story from our side today. In pursuing AT&T Wireless, we were attempting to see if we could create more shareholder value than we currently have with Verizon," said a Vodafone spokesman who declined to be named.
"This was not a question of price, since a company the size of Vodafone has access to funding. We had laid down a benchmark in terms of price early on. Beyond that benchmark, there was no point in proceeding as no value was created for shareholders," he said.
Representatives from Cingular, in Atlanta, and AT&T Wireless Services couldn't immediately be reached for comment.
The purchase of AT&T Wireless by Cingular will consolidate the U.S. wireless market from six major companies to five. The other four companies are Nextel Communications Inc., T-Mobile USA Inc., Sprint Corp. and Verizon.
Cingular is currently the second-largest wireless company in the U.S., with 24 million subscribers. The operator is jointly owned by SBC Communications Inc. in San Antonio, which owns 60%, and BellSouth Corp. in Atlanta, according to the company's Web site.
AT&T Wireless employs approximately 30,000 people in some 500 locations across the U.S., and as of the end of 2003 reported about 22 million consolidated subscribers, the company said. AT&T Wireless split from AT&T Corp. in July 2001 to become an independent company.
Along with creating the largest Global System for Mobile Communications (GSM) network in the U.S., Cingular's acquisition of AT&T