So AT&T is set to acquire BellSouth for $67 billion in stock.
But that deal, at a potential $4 billion or so, looks like a steal. There’s something vaguely reminiscent of AOL’s “acquisition” of TimeWarner. Verizon is allegedly under the gun if this deal goes through. I think my favorite wireless carrier could be secretly banging the drum and smoking a victory cigar this morning.
I’m sure a bunch of smart people signed off on this one. However, when two large regulated companies merge, it’s often not immediately clear what will happen.
I think the government will approve this transaction. But not just because it is probably pro-competitive. And not because the Bush Administration allegedly always approves communications industry mergers.
Rather, it will be approved because it may prove to be irrelevant.
Think in terms of branding:
— Old AT&T was American Telephone & Telegraph. Think: Ma Bell.
— New AT&T faces cable, wireless and VOIP challenges. So perhaps think: Grandma Bell.
And the one brand that is raising the bar with growing appeal to consumer and business markets, Cingular, is to be discarded.
Updates: Kirkendall, Ribstein and the omnipresent WSJ Law Blog. 8 Mar 06: Holman Jenkins of the WSJ ($) playfully calls AT&T CEO Ed Whitacre “Mr. T. ” and suggests his forthcoming nightmare goes by the name of WiMax. 10 Mar 06 BusinessWeek has an interview suggesting that AT&T make be making a brand new mistake.