A&T, BellSouth in $67 Bil. Deal

NEW YORK There’s a new telecom giant on the block, thanks to the proposed $67 billion merger between AT&T and BellSouth.

The deal makes the new AT&T the largest communications company in the United States, according to a statement. AT&T is now owner of Cingular Wireless, the nation’s biggest cell phone company, formerly co-owned by AT&T and BellSouth.

“This transaction combines two solid, very well-run companies,” AT&T chairman and CEO Edward E. Whitacre, Jr. said in a statement. “It will benefit customers through new services and expanded service capabilities.”

It also means major savings, as operating costs of three formerly separate companies—AT&T, BellSouth and Cingular Wireless—will now be streamlined. A reduction in advertising and marketing budgets is to be expected, and three firms will now be known as a single brand, the company said.

Last year San Antonio-based AT&T, which owns 60 percent of Cingular, spent $870 million marketing the wireless company, and $300 million marketing itself. BellSouth spent $115 million on media, per Nielsen Monitor-Plus.

Omnicom Group’s GSD&M in Austin, Texas, is lead agency on the AT&T account.

WPP Group’s Grey in New York handles the $115 million BellSouth business.

Atlanta-based BellSouth, now one of the nation’s largest local service providers, was part of AT&T until 1984, when the Justice Department split the company. Regulatory and shareholder approval of yesterday’s agreement is still pending and is expected to take about 12 months. In 2004, SBC Communications bought AT&T and adopted its famous name.

—Brandweek staff report