Cingular wins AT&T Wireless bid
ATLANTA, Georgia (CNN) -- After winning a bidding war with rival Vodafone, Cingular Wireless announced Tuesday it will purchase AT&T Wireless in a deal estimated at more than $40 billion.
Atlanta-based Cingular, the second-largest U.S. mobile phone company, outbid Vodafone with a $15-per-share offer. The deal would create the largest mobile phone company in the United States.
Cingular's offer is estimated to be worth $46.7 billion, including $40.7 billion in cash. In addition, Cingular will take on $6 billion in debt from AT&T Wireless.
Vodafone, which said Tuesday it had pulled out of negotiations for AT&T Wireless, had made a reported $38 billion offer.
The deal is subject to the approval of AT&T Wireless shareholders and U.S. regulatory authorities and could be completed as soon as late 2004, Cingular said in a statement.
For now, the company said, the name of the combined firm will be Cingular Wireless. The combined company would have 46 million customers in 49 states and would cover 97 of the nation's top 100 markets.
The combined 2003 annual revenues of the two companies would have exceeded $32 billion, Cingular's statement said.
Stan Sigman, president and CEO of Cingular Wireless, is expected to run the merged company, according to Cingular.
Sigman said the deal was "great news for America's wireless users."
"By combining the strengths of these two companies we expect to accelerate the availability of advanced wireless services for consumers," Sigman said in the statement.
"This combination is expected to create customer benefits and growth prospects neither company could have achieved on its own and will mean better coverage, improved reliability, enhanced call quality and a wide array of new and innovative services for consumers."
John D. Zeglis, chairman and CEO of AT&T Wireless, called the deal "a triple win for AT&T Wireless shareowners, customers and employees."
"For shareholders, the transaction provides a handsome return on investment. For customers, this means all the advantages only the nation's largest wireless company can provide," Zeglis said.
"For employees who become part of the combined company, this means more opportunities than they otherwise would have had with AT&T Wireless as a standalone company."
In withdrawing from the bidding, Vodafone said it "concluded that it was no longer in its shareholder's best interests to continue discussions."
"Vodafone remains committed to its existing position in the U.S. market with its successful partnership in Verizon Wireless," the company's statement said.
Vodafone owns a 45 percent stake in Verizon Wireless.
AT&T Wireless, the third-largest U.S. mobile phone group, put itself up for sale on January 22.
Vodafone shares jumped more than 5 percent to 139-1/4 pence by 0852 GMT following an initial report of Cingular's victory.
Cingular is owned by cash-rich regional carriers SBC Communications Inc. and BellSouth Corp.