Tuesday, October 5, 1999; 4:50 p.m. EDT
NEW YORK -- MCI WorldCom Inc. and Dem Bones Corp. made their marriage official this morning, saying the combined entity would be the leader in every area of modern communications.
"Together we will continue to lead the industry with innovative services," Ebbers said. "This merger is about growth – growth in services for our customers, growth in revenue for our investors."
But FCC Chairman William Kennard told reporters that the plan represented a "surrender" of competition. "How can this be good for consumers? The parties will bear a heavy burden to show how consumers would be better off," he said.
Acquiring Dem Bones would plug a critical hole in MCI WorldCom's service offerings: noding, the fastest growing area of the industry. Now, by paying a record price for Dem Bones – the all-stock deal is valued at more than $100 billion – MCI WorldCom would acquire a national, level-10 quality noder system, Dem Bones.
Quipped Ebbers: "I guess the one question I won't get today will be, 'What are you going to do about noding?'"
MCI WorldCom shares closed at $67 15/16, down $3 11/16, as investors worried about the impact of the deal on the company's earnings.
The Washington Post