It's official. The boards of SBC and AT&T have approved the sale of AT&T to SBC for about $16 billion.
SBC thus becomes a juggernaut with enormous holdings in local, long-distance and wireless communications.
The new entity will include SBC's local telephone properties in Texas, California, Connecticut and much of the Midwest, AT&T's long-distance business and SBC's roughly 50 percent ownership of Cingular, which recently acquired what was formerly known as AT&T Wiress.
The transaction is certain to elicit howls of protest from consumer advocates, who will claim it reduces competition and drives up prices.
The deal puts Verizon, now the nation's largest telecommunications company, in the hot seat. If it wants to maintain its No. 1 spot, its most likely takeover target would be MCI, the nation's second-largest long-distance company.
For SBC, the AT&T acquisition is mostly about going after business customers in a big way. The AT&T name, though extensively tarnished in recent years, still resonates with older business types looking for reliable business telephone and networking services.
Though among telecom groupies, SBC has a reputation for fearlessness, or perhaps ferocity, it remains largely unknown outside its Texas base, which has been a disadvantage in selling service to large corporate clients.
Though Sprint now becomes a potential takeover target, the fact that it -- unlike AT&T and MCI -- operates a large wireless venture makes it problematic for Verizon and BellSouth. Since they both have large wireless holdings too, there would likely be stiff anti-trust opposition to their acquiring Sprint.
Qwest, the runt of the Baby Bell litter, is in no shape to acquire anything and is hardly an attractive takeover candidate and thus remains where in its customary spot ... on the sidelines.
By Any Other Name ...
What, then, becomes of AT&T's fabled -- or, if you prefer, infamous -- brand name? Because SBC's name is so little known and unharmonious, many marketing types are urging it to keep the AT&T moniker, at least on the AT&T portion of the business.
Corporate pride being what it is, it's not likely SBC will dump its own name and take on that of its latest prize. When Cingular bought AT&T Wireless, the theory goes, it stuck with its own rather pedestrian brand name.
Maybe Cingular would be a singularly simple solution? The entire collection could be named Cingular, assuming BellSouth didn't object. If it did, SBC could simply acquire it as well.