Verizon's MCI deal gets Washington green light
Thank god that's over
The US Department of Justice has OK’d Verizon’s $8.4bn takeover of MCI, finally bringing an end to one of the US’ most spectacular corporate soap operas.
The DoJ is forcing the combined company will have to offload some some dark fiber connections to ensure competition. The Feds are enforcing similar divestitures on the SBC/AT&T combination, which has also just won approval. (We’re not quite sure how the competitive arithmetic adds up on this, but this is the telecommunications world after all.
All that remains for the deal to proceed is Federal Communications Commission, but given the FCC’s laissez faire attitude to telecoms competition, that is seen as a formality.
Verizon’s takeover of MCI, formerly known as WorldCom caps a rancorous takeover battle. Rival telco Qwest also sought to acquire MCI. Eventually, Verizon won out, capturing MCI for $8.4bn, which was less than Qwest had on the table.
Still, that explosive takeover slugfest was nothing compared to the spectacular collapse of WorldCom in 2002, after an $11bn accounting scandal floored the firm. A number of the firm’s former top brass are now serving time. After helping destroy confidence in the US’ business world’s ethics, albeit with some help from Enron, WorldCom languished in Chapter 11 for a couple of years, before being born again as MCI dragging itself out of bankruptcy protection. It then promptly began trolling itself around the market looking for a suitor.
All that remains is for Hollywood to shoot the movie. Straight to cable, of course. ®