Verizon Swoops in on MCI

By: Associated Press
By: Associated Press

MCI is answering a call from Verizon Communications to combine in a deal valued at $6.7 billion in stock and cash.

The companies confirm earlier reports that a deal was imminent.
Verizon's move snatches the once-troubled long-distance provider
away from a rival bid from Qwest Communications.

The purchase price is about a-half billion dollars below what Qwest offered for MCI.

Verizon likely won MCI's favor because it is larger and in better financial shape than Qwest. Verizon is the dominant local phone company in the Northeast and a top cellular player, while Qwest is the local phone carrier across the more sparsely populated Rocky Mountains and Pacific Northwest.

The deal comes two weeks after a $16 billion merger deal between AT&T and SBC Communications.

MCI's business isn't as large as AT&T's, but its network gives Verizon a national footprint with which to serve large companies hesitant to trust their communications to a regional service provider.

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