US Report: EU panel OKs merger between MCI-WorldCom
Published: 22 Jun 1998 10:27 BST
A European Union antitrust panel recommended approval of the $37bn (£22.6bn) merger between telecommunications powers WorldCom and MCI Communications provided MCI sells its Internet businesses, an industry source said Friday.
The panel of experts from the 15 EU countries also requested clarification about how Washington-based MCI would transfer its Internet retail customers to a new owner, the source said. "We remain optimistic we will reach an agreement soon," MCI spokesman Frank Walter said after the meeting.
The panel met to consider a draft decision by the European Commission on conditions for granting EU regulatory approval to the $37bn merger.
Bloomberg LP's news service reported the panel - on assurances from EC antitrust authorities that MCI and WorldCom had addressed nearly all concerns - voted to recommend approval of the deal, if MCI resolves details about transferring Net customer accounts to a buyer.
Forced into progressively larger divestitures to answer objections that MCI WorldCom would own so much Net backbone that it would control cyberspace, the companies now seem to have sign-offs essentially in hand, said Credit Suisse First Boston telecom analyst Frank Governali.
The sources did not elaborate on the proposals, but said MCI would sell both its wholesale and retail Internet businesses. The panel and the commission also wanted clarification on how Internet customers would be passed on to the buyer of those businesses.
The deal, announced Nov. 10 and valued at $37bn at the time, still requires approval by U.S. regulators.
Both WorldCom and MCI hit new all-time highs in heavy Nasdaq trading Friday. WorldCom climbed to an all-time high of $47.375 before trading at $47.125, up $1.375, in the afternoon. MCI hit a record high of $56.19, up $1.50.
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