Reports: SBC in talks to buy AT&T for over $15B

A deal would create the largest phone company in the U.S.

SBC Communications Inc. is reportedly in talks to buy AT&T Corp., a deal that would create the largest phone company in the U.S. and effectively spell the end of the Ma Bell era.

Executives from both companies have been in negotiations in recent weeks to discuss the marriage, according to a Wall Street Journal online report today, citing people familiar with the situation. SBC could reportedly pay more than $15 billion for the telecom stalwart, which was known as Ma Bell before being broken up into regional carriers in 1984, according to the Journal.

The talks were also reported in today's New York Times.

SBC, a regional operator with headquarters in San Antonio, offers services in 13 states -- including California, Texas and Illinois -- and serves more than 54 million access lines. It also owns 60% of cellular carrier Cingular Wireless, which has more than 46 million wireless customers.

SBC has been focused on its wireless business, broadband access and, most recently, TV programming. The acquisition would allow SBC to bolster its fixed-line business and gain AT&T's valuable list of corporate and government customers. AT&T, in Bedminster, N.J., has been pulling out of consumer markets to concentrate on its business customers.

Although it is still the U.S.'s largest long-distance carrier, it has been facing revenue declines in recent quarters, making it ripe for acquisition, according to the Journal.

The two companies have been in talks before without reaching a deal, but this time, they are in serious negotiations around price and terms, the Journal reported. If the acquisition goes ahead, it could face significant regulatory scrutiny, the report said.

A representative for AT&T in Europe declined to comment on the report, saying the company does not respond to rumor and speculation. Representatives for SBC weren't immediately available to comment.

Copyright © 2005 IDG Communications, Inc.

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