BT Buys Back Concert From MCI
Published: 14 Aug 1998 06:42 BST
BT Thursday said it would pay about $1bn (£.6bn) to take back its 24.9 percent stake in Concert - its joint venture with MCI Communications. Concert has about $1bn in annual revenue and provides voice and data services to about 3,500 international companies.
After WorldCom beat BT in the bid for MCI, BT said it intended to buy out its stake in Concert, but terms were not set until Wednesday. BT will regain control of Concert immediately after MCI merges with WorldCom, which is scheduled to happen later this summer. BT is expected to bring in additional investors to help fund Concert.
WorldCom shares rose 81 cents to $50.50 following the news. MCI's shares rose $1.38 to $61.75. BT's American depositary receipts rose $1.50 to $133.38.
The terms of the agreement call for MCI to continue to sell Concert's services in the Americas for up to five years after the close of the MCI/WorldCom merger. In the US, Concert services will be sold primarily through AT&T , which had originally opposed the formation of Concert on the grounds that a joint venture between BT and MCI would block its own access to British markets.
In July, BT and AT&T announced an agreement to create their own joint venture to sell voice, data and video services to international customers. BT and AT&T will each invest about $1 billion to create a new company with roughly 5,000 employees.
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