Under the agreemnt [sic], Verizon will pay $4.795 billion worth of its stock and $488 million in cash for MCI’s shares. In addition, MCI shareholders will be paid dividends worth $1.463 billion.
Verizon is also assuming MCI’s debt, expected to total $4 billion at closing, and estimates the acquisition will yield about $1 billion per year in pre-tax operational savings.
The deal is subject to MCI shareholder approval and requires regulatory approval, which the companies hope to get in about a year.
This just 2 weeks after SBC announced their deal to purchase AT&T for $16 billion (SBC competes with Verizon and Qwest). Qwest made a move on MCI, and Verizon was put in the position of responding to Qwest’s new bid as well as SBC’s new growth via acquisition.
So much for the fat kid in a starvation contest analogy… this is turning into a pie-eating contest.