Verizon Acquires MCI

Verizon Communications Inc. (www.verizon.com) and MCI, Inc. (www.mci.com) today announced that Verizon has agreed to acquire MCI for $4.8 billion in equity and $488 million in cash.

The transaction adds new strength to the telecommunications services both companies provide.  It ensures that consumers and businesses will have a supplier with the financial strength to maintain and improve MCI's Internet backbone network, which is the largest in the world based on company-owned points of presence.

The transaction will also mean better service for Enterprise customers by enhancing Verizon's ability to compete for and serve large-business and government customers with a complete range of services, including wireless and the most sophisticated IP (Internet Protocol) based services.

The Boards of Directors of both companies have approved the agreement.
MCI shareowners will receive 0.4062 shares of Verizon common stock for each common share of MCI.  This is worth $4.795 billion and equivalent to $14.75 per MCI share, based on Verizon's closing price on Friday, Feb. 11.
MCI shareowners will also receive $1.50 per MCI share in cash, worth $488 million.  This consideration is subject to adjustment at closing and may be decreased based on MCI's bankruptcy claims-related experience.

In addition, MCI will pay its shareowners quarterly and special dividends of $4.50 per share, worth $1.463 billion.  This includes a 40-cent-per-share quarterly dividend approved by the MCI Board on Friday, Feb 11.
In total, the transaction values MCI shares at $20.75 a share, or $6.746 billion.

Verizon will assume MCI's net debt (total debt less cash on hand), targeted to be approximately $4 billion at closing, and customary closing conditions will apply.

In addition to MCI shareowner approval, the acquisition requires regulatory approvals, which the companies are targeting to obtain in about a year.

"This is the right deal at the right time," said Verizon Chairman and CEO Ivan Seidenberg. 

"With our heritage of innovation, global network and world-class Enterprise capabilities, MCI is the right partner for Verizon," said Michael D. Capellas, MCI president and CEO.