SBC Communications Announces Plans To Acquire Comcast Cellular Corporation
Combined Service Region To Cover Most Of The Travel Corridor From Boston To Washington/Baltimore, Creating Formidable Competitor For Customers Throughout The Northeast
San Antonio, Texas, January 20, 1999
Nationwide Wireless Coverage (PDF file)
(For best on-screen resolution, view file at 125% or higher in PDF viewer)
SBC Communications Inc. (NYSE:SBC) today announced it has agreed to acquire Comcast Cellular Corporation, the wireless subsidiary of Comcast Corporation, in a transaction valued at $1.674 billion.
The transaction will bring together existing SBC wireless service areas in Washington/ Baltimore, Connecticut, Rhode Island, Massachusetts and Upstate New York, with Comcast Cellular's properties in the Philadelphia area, New Jersey and Delaware. The SBC properties in the Northeast operate under the Cellular One brand name, with the exception of the SNET Wireless brand offered in Connecticut. Comcast offers wireless service under the Comcast Metrophone name in Pennsylvania, and as Comcast Cellular One in Delaware and New Jersey, covering an area with a total population of about 8.4 million.
In addition, under the terms of the agreement, SBC will purchase Comcast's wireless systems in Aurora-Elgin and Joliet, Illinois, as well as 12 PCS licenses in Pennsylvania acquired by Comcast in 1997. SBC for several years has been operating the Illinois properties it is purchasing under a previous agreement between the companies.
"The agreement improves SBC's ability to compete and to offer customers one company for wireless value, quality and coverage throughout the Northeast," said Edward E. Whitacre, Jr., chairman and chief executive officer of SBC Communications.
"This acquisition will have real and lasting value for SBC's customers and shareholders, and is consistent with our strategy of obtaining wireless licenses that expand our current service areas," Whitacre said.
With the Comcast wireless properties, and once SBC's pending merger with Ameritech is complete, SBC will offer wireless service in nine of the top 10 U.S. markets. The Comcast agreement will expand SBC service to Philadelphia, the 4th largest market.
Under the terms of the agreement, SBC will pay $400 million in cash and assume Comcast Cellular's current debt of $1.274 billion. The transaction will be accounted for through the "purchase accounting" method.
The companies hope to complete the merger by the third quarter of 1999, pending regulatory approvals.
"The companies have compatible service areas and technologies, which will make the transition smooth," said Stan Sigman, president and chief executive officer of SBC Wireless. "We expect to continue growing these properties as we integrate them into SBC's wireless network."
SBC wireless companies - Southwestern Bell Wireless, Pacific Bell Wireless, Nevada Bell Wireless, SNET Wireless, as well as Cellular One in Chicago and Central Illinois, Massachusetts, Rhode Island, Upstate New York and Washington/Baltimore - currently provide analog and digital wireless service to more than 6.5 million customers, making the company the third largest wireless provider in the United States. In addition, SBC has pending a merger with Ameritech Corporation, which serves 3 million wireless customers in Illinois, Michigan, Ohio, Indiana, Missouri, Wisconsin and Hawaii.
Comcast's wireless properties serve more than 800,000 customers with analog and digital wireless service, and the company has a market penetration rate of more than 10 percent.
"We look forward to working with Comcast's outstanding employees and are committed to providing customers with the products, services and coverage they want and need," Sigman said.
SBC Communications was advised on the transaction by Salomon Smith Barney.
SBC Communications Inc. (www.sbc.com) is a global leader in the telecommunications industry, with more than 36.9 million access lines and 6.5 million wireless customers across the United States, as well as investments in telecommunications businesses in 10 other countries. Under the Southwestern Bell, Pacific Bell, SNET, Nevada Bell and Cellular One brands, SBC, through its subsidiaries, offers a wide range of innovative services. SBC offers local and long-distance telephone service, wireless communications, data communications, paging, Internet access, and messaging, as well as telecommunications equipment, and directory advertising and publishing. SBC has approximately 129,000 employees and its annual revenues rank it in the top 50 among Fortune 500 companies.