Verizon Communications and MCI closed their merger on Friday, creating a carrier with a massive U.S. presence in homes and businesses as well as a major global data network.
The merger, agreed upon last Feb. 14, followed a high-stakes battle for MCI between Verizon and another U.S. regional carrier, Qwest Communications International Inc. Along with SBC Communications' acquisition of AT&T to form the new AT&T, a deal that closed late last year, it completes a wave of consolidation of the U.S. telecommunications industry. Verizon, based in New York, will keep its corporate name and now has approximately 250,000 employees serving customers in 150 countries. The combined company has approximately US$90 billion in annual total consolidated operating revenues.
Verizon's top management team, led by Chairman and Chief Executive Officer (CEO) Ivan Seidenberg, and Board of Directors will remain unchanged, the company said. Michael Capellas, who was president and chief executive officer of MCI, is leaving the business now that the merger has closed, the company said.
Business and government customers of the former MCI will be served by a new unit of Verizon, called Verizon Business. The new group will also absorb the former Verizon Enterprise Solutions Group. The new unit operates a global IP network of more than 100,000 miles and will announce new products and services later this month. John Killian, formerly senior vice president and chief financial officer of Verizon's domestic telecommunications business, has been named president of the new unit.
Verizon's other main business units will be its domestic landline division and Verizon Wireless.
Verizon is paying a total of US$8.5 billion in cash and stock for MCI, according to spokesman Bob Varettoni. Trading in MCI shares will continue until the end of the trading day Friday.
On Thursday, MCI, based in Ashburn, Virginia, announced it had restated its financial results for the first three quarters of 2005, ending Sept. 30. Because of an error related to its contributions to the U.S. Federal Universal Service Fund, it had overstated net income for the period by US$52 million, the company said in a statement. However, it said the restatement would not affect the closing of the merger, which took place less than 24 hours after the restatement was announced.