NEW YORK-The U.S. Department of Justice Antitrust Division gave its approval April 24 for Bell Atlantic Corp.’s $23 billion takeover of Nynex Corp. The Federal Communications Commission also must grant its approval before the companies can close the merger.
“The (Antitrust) Division has decided that it will not challenge the transaction, having concluded that the merger does not violate the antitrust laws,” the Department of Justice said.
The proposed acquisition, announced in April 1996, would create a new company called Bell Atlantic, headquartered in New York. The combined company would serve 39 million telephone access lines and nearly 5 million wireless customers, at least 80 percent of which are in 13 Eastern Seaboard states and the District of Columbia, with the remainder in various countries around the world.
The new Bell Atlantic will own 100 percent of Bell Atlantic Nynex Mobile, which will continue to be headquartered in Bedminster, N.J., and 50 percent of PrimeCo Personal Communications L.P., which will retain its Dallas headquarters. PrimeCo is a partnership among Bell Atlantic/Nynex, U S West Inc. and AirTouch Communications Inc. AirTouch is expected to gain control of U S West’s ownership in PrimeCo by the end of the year.
“We’re extremely pleased with the Department of Justice’s decision, which came after a thorough and comprehensive review,” said Ray Smith, chief executive officer of Bell Atlantic. “Our merger will continue to open communications markets … and help realize the promise of the 1996 Telecom Act.”
Ivan Seidenberg, chief executive officer of Nynex, said, “The merger … will promote customer choice, innovation and economic growth in the communities we serve … We intend to be our customers’ first choice for communications and information services.”
Nynex has the highest cost structure of any regional Bell operating company, said Guy W. Woodlief, a telecommunications analyst for Prudential Securities Inc., New York. “Bell Atlantic is one of the better companies at removing costs from their structure, and this is important when competition starts to intensify as local markets open up.”
