Vodafone board members awoke on Tuesday — on a morning when they had scheduled a meeting to approve their deal-cinching offer to AT&T Wireless — to find that they had literally been caught napping.
The New York Times reported that on Monday night, Vodafone Group of Britain had all but concluded an acquisition of the third-largest wireless provider in the United States. Vodafone was prepared to raise its offer from $38 billion to $40 billion — what it believed would be the last of see-sawing offers made by the company and by Cingular.
Late Monday, continued the Times, Cingular sent its dealmakers home, believing they had lost out. But Cingular’s parent companies, SBC Communications and BellSouth — which had long wanted to pair off AT&T Wireless and Cingular, according to the Times — convened board meetings by conference call about 1:30 a.m. Tuesday, Eastern time. In England, it was 6:30 a.m.,/p>
While most of Vodafone’s management and board were still sleeping, continued the Times, Cingular made a final, take-it-or-leave-it offer of nearly $41 billion a little after 2 a.m. The offer — “far higher than anyone expected the auction to go,” said the Times, was approved by AT&T Wireless at about 3 a.m., just as Vodafone was about to begin its 8 a.m. board meeting.
Less than three years after being spun off from Ma Bell, AT&T Wireless will combine with Cingular to serve 46 million subscribers, surpassing the 37.5 million for the current leader, Verizon Wireless.
AT&T Wireless chief executive John Zeglis will not remain with the company once a deal is approved, he told reporters Tuesday in a conference call. Cingular CEO Stan Sigman will be chief of the combined Cingular-AT&T Wireless, said Zeglis, according to the Associated Press. The combined company will carry the Cingular name, said Ralph de la Vega, Cingular’s chief operating officer, the AP reported.
BellSouth chief executive Duane Ackerman stated that Cingular expected to reap some $1 billion in expense savings through 2006 because of the deal, according to the AP. Cingular estimates that the combined company will save $2 billion a year after that, according to the Times.
The combined company would have about 70,000 employees, though some of the savings expected for the company in future years would certainly come from the elimination of redundant positions.