BT this morning announced it has entered a $20 billion merger agreement with MCI the US's second largest telecoms group. The deal comes eight months after BT's unsuccessful March negotiations with Cable & Wireless.
BT is roughly twice the size of MCI and acquired a 20 per cent stake in 1993, creating the Concert Communications Services company, which provides telecoms solutions to 3,000 businesses wordwide. However, MCI holds a strong position in the US, is a major distributor of the Microsoft Network and holds a 13.5 per cent share of Rupert Murdoch's News Corporation.
The deal will recreate BT as a significant global force and make the new company the world's second largest telecoms group after Japan's NTT. BT will continue to trade under the BT name in the UK and US but change its name to Concert as part of the deal.