p2pnet.net News:- AT&T spin-off SBC, now America’s second largest phone company, is to buy AT&T for $16 billion in stock.

The purchase marks the end of AT&T as a 130-year-old company that brought telephones into American homes, says Bloomberg News.

“SBC may be buying a global phone network and business customers such as Lockheed Martin Corp,” but, “It’s also buying a company whose sales have declined for five years,” says the story.

AT&T will have three seats on the combined company’s board, states Bloomberg, pointing out SBC has grown from the smallest of seven local-phone providers spun off in the 1984 break up of AT&T to become a company with more than 50 million local-calling customers.”

SBC’s AT&T deal may makes MCI, AT&T’s top rival, “a target of another local-phone company such as Verizon Communications, Jeffrey Kagan, an independent telecommunications analyst in Atlanta is quoted by Bloomberg as saying.

“The deal comes amid an increase in telecommunications mergers, including Sprint Corp.’s purchase of Nextel Communications Inc. and Cingular Wireless LLC’s acquisition of AT&T Wireless Services Inc. “

But it, “has already drawn criticism from analysts, who slammed the $16 billion purchase price as too much for a company with shrinking revenues and questionable growth prospects,” says Reuters.

“AT&T’s business doesn’t seem that accretive or value added,” it has analyst Greg Gorbatenko saying.

“AT&T last July withdrew from its traditional residential phone market, stung by government regulation and a changing marketplace as consumers turn increasingly to wireless services.”

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See:-
end of AT&T - SBC Agrees to Buy AT&T for $16 Billion in Stock, Bloomberg News, January 31, 2005
drawn criticism - SBC to buy AT&T for $16 billion, Reuters, January 31, 2005

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