Verizon and MCI to tie the knot

$6.7bn marriage - and on Valentine's Day too

By Tim Richardson • Get more from this author

Posted in Financial News, 14th February 2005 12:28 GMT

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Verizon and MCI are to tie the knot, according to a Valentine's Day announcement from the US. The deal is worth $6.7bn (£3.55bn) in shares and cash and Verizon has also agreed to take on board MCI's $4bn (£21.bn) debt.

In a joint announcement the happy couple said the deal "adds new strength to the telecommunications services both companies provide...[and] ensures that consumers and businesses will have a supplier with the financial strength to maintain and improve MCI's Internet backbone network".

"This is the right deal at the right time," said Ivan Seidenberg, Verizon chairman and CEO. "We have been evaluating a transaction with MCI for some time, and now we have the opportunity to reach an agreement at the right price that works for both companies and at a time when MCI is gaining momentum. It is a natural and logical extension of Verizon's strategy to transform our company to serve growth markets and offer broadband technologies.

The pair intend to save cash by driving efficiencies, increasing flow and pursuing new revenue opportunities.

With more than $71bn (£37.6bn) in annual revenues, Verizon is a great big hunk of telco with more than 210,000 workers.

But spare a thought for Qwest Communications International Inc.. It had originally offered $6.3bn (£3.3bn) for MCI, with reports over the weekend suggesting it had even raised its bid to $7.3bn (£3.9bn).

Still, better to have bid and lost, than not to have bid at all...plenty more telcos in the sea...anyway, MCI's not good enough for you etc. ®