The company that later became known as AT&T began in 1875, in an arrangement among inventor Alexander Graham Bell and the two men, Gardiner Hubbard and Thomas Sanders, who agreed to finance his work. In 1877, the three men formed the Bell Telephone Company to exploit the invention. In 1882, American Bell acquired a controlling interest in the Western Electric Company, which became its manufacturing unit. The enterprise became known as the Bell System.
In 1925, Walter Gifford, president of AT&T, decided that AT&T and the Bell System should concentrate on its goal of universal telephone service in the United States. He sold the International Western Electric Company to the newly formed International Telephone and Telegraph Company (ITT) in 1925. Although AT&T retreated from international manufacture, it retained an international presence through its drive to provide global telephone service to customers in the U.S.
The new AT&T began evolving to an integrated voice and data communications company. By mid-2000, AT&T had three rapidly evolving networks- data, broadband, and wireless, and four separate businesses-cable, wireless, business, and consumer.
In January 2005, AT&T's announced the pending $16 billion merger with SBC Communications to create the industrys premier communications and networking company. Through this deal, the people of AT&T have the opportunity to build the defining entity in global communications for the 21st century. a company capable of delivering advanced networking technologies and a full suite of integrated communications services throughout the world.
In November 7, 2008, AT&T announced its plan to acquire regional wireless and wired communications service provider, Centennial Communications Corp. The propose transaction is estimated in $944 million in cash. With this transaction, AT&T is looking to enhance its wireless coverage for customers in the Midwest and Southeast of the United States, Puerto Rico and the U.S. Virgin Islands. In addition, AT&T will be able to upgrade its wired network by adding Centennials wired platform to its network. This will result in a more effective capability from AT&T to better serve their business to business customers.
Currently Centennial counts with a 1.1 million wireless customers in the following areas: Puerto Rico and the U.S. Virgin Islands as well as in Kalamazoo, Cass City, Newaygo, Battle Creek, Benton Harbor, Jackson, Roscommon, Allegan, Grand Rapids, Lansing, Muskegon and Saginaw-Bay City, Mich.;
Miami, Kosciusko, Huntington, Kokomo, Muncie, Anderson and Lafayette, Ind.; Lima and Findlay-Tiffin and Williams County, Ohio; Lafayette, Alexandria, Iberville, Bastrop and Lake Charles and Caldwell, West Feliciana, Beauregard and Desoto parishes, La.; Beaumont-Port Arthur, Texas; and Claiborne and Copiah counties, Missippi. These areas represent places where currently AT&T has to rent Centennials network to provide service to their wireless network. This is one of the reasons why this merger is so attractive to the AT&T stockholders and management team.
For Centennials 1.1 million wireless subscribers this merger represents access to the largest wireless network today, this includes to become part of the best global coverage and be part of the nations leading lineup of innovative wireless devices such as: IPhone 3G, an AT&T exclusive. Centennial's customers who choose select smart phones such as the BlackBerry Bold, another AT&T exclusive and AT&T Laptop Connect cards will also enjoy free access to the nation's largest Wi-Fi network.
This merger transaction demonstrates AT&T commitment to constantly improve and enhance their network capability, quality and coverage. Centennials high-quality 850 MHz spectrum will improve service quality for AT&T customers in parts of Indiana, Louisiana, Michigan, Mississippi, Ohio and Texas. For the Puerto Rico area Centennial also provides switched voice and high-capacity data and Internet Protocol solutions for business customers. The merger transaction gives AT&T a wired network presence in Puerto Rico that allows the company to better serve its international business customers with a presence in this U.S. territory.
Why Centennial is so attractive to AT&T growing and network improving plans? "Centennial has a 20-year history of doing what is best for our customers, and this transaction is a natural next step for us," "I thank our associates for their dedication and hard work in always rising to the challenges of our rapidly changing industry, and I take pride that our company will become part of a world-class organization like AT&T." said Michael J. Small, CEO of Centennial (www.centennialpr.com).
Under terms of the agreement, Centennial stockholders will receive $8.50 per share for a total equity price of $944 million. Including net debt, the total enterprise value is approximately $2.8 billion. AT&T expects the proposed transaction to deliver significant value to its stockholders. The acquisition offers opportunities for synergies in areas including corporate overhead, advertising, customer care and network operations. In the first year after the transaction closes, AT&T expects minimal dilution to EPS and cash flow, driven by upfront integration costs ( http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=26288).
The acquisition is subject to regulatory approval, the approval of Centennial's stockholders and other customary closing conditions. Welsh, Carson, Anderson & Stowe, Centennial's largest stockholder, has agreed to vote in support of this transaction. AT&T is working to obtain approvals by the end of the second quarter of 2009.
ReferencesAT&T to Acquire Centennial Communications, Enhance Service for Wireless Customers and Businesses. (2008) Retrieved May 12, 2008 from http://www.att.com/gen/pressroom?pid=4800&cdvn=news&newsarticleid=26288