Bell Atlantic and NYNEX Agree to Merger of Equals


April 22, 1996size = +1>

Bell Atlantic and
NYNEX Agree to
Merger of Equals

Unites Natural Market

Merger Will Create Market Leader and Nation's

Second Largest Telecommunications Company

PHILADELPHIA/NEW YORK -- The boards of directors of href = "http://www.bell-atl.com">Bell Atlantic (NYSE:BEL) and = "http://www.nynex.com">NYNEX (NYSE:NYN) have unanimously approved a
definitive agreement for a merger of equals between the two corporations
with a combined market value in excess of $50 billion.

The merger will create the nation's second largest
telecommunications company, with 133,000 employees, 1995 revenues of
$27.8 billion (including unconsolidated wireless) and earnings of $3.1
billion (after adjustments for special items). The company will provide
telecommunications, entertainment and information services to 26 million
customers in 13 Northeastern and Middle Atlantic states and the District
of Columbia -- the most communications-intensive region of the country --
as well as to customers throughout the nation and the world. The new
company will also be one of the world's largest providers of wireless
communications, serving 3.6 million customers.

The name of the new company will be Bell Atlantic. The corporate
headquarters will be in New York City. The new company will maintain
significant operations in Boston, Philadelphia, and Arlington, Va.

Under the terms of the agreement, NYNEX shareholders will receive
one share in the new company for each NYNEX share owned and Bell Atlantic
shareholders will receive 1.302 shares in the new company for each Bell
Atlantic share owned. The transaction is expected to be accounted for as
a pooling of interests and to be tax-free to both companies'
shareholders. Closing is expected within 12 months.

The board of directors of the new company will consist of an
equal number of members from each company's board.

Raymond W. Smith,
chairman and
chief executive officer of Bell Atlantic, will be the chairman and chief
executive officer of the new company. "http://www.nynex.com/who_we_are/nynex_policy_council/seidenberg.html">Ivan G.
Seidenberg, chairman and chief executive officer of NYNEX, will be
vice chairman, president and chief operating officer. According to the
terms of the agreement, Seidenberg will become chief executive officer of
the new company approximately one year after the closing of the merger,
and chairman upon Smith's retirement.

The designated key management team for the new company will
consist of top managers from Bell Atlantic and NYNEX. The new chief
financial officer and executive vice president, Finance and Corporate
Development, will be "http://www.nynex.com/who_we_are/nynex_policy_council/salerno.html">Frederic V.
currently vice chairman, Finance and Business Development, NYNEX.

The heads of the major business units will be:

  • Lawrence T. Babbio,
    , currently vice chairman, Bell Atlantic, will be
    president and CEO, Wireless & Global Enterprises;
  • James G. Cullen,
    currently vice chairman, Bell Atlantic, will be president
    and CEO, Telecom Group;
  • "http://www.nynex.com/who_we_are/nynex_policy_council/jalkut.html">Richard A.
    Jalkut, currently president and group executive, NYNEX, will
    be president and CEO, Network Services.

"This new company will serve the world's best communications
marketplace. By combining, we will be able to increase our revenues,
reduce our costs, and improve our service. Under a single brand we will
build on our common strengths and provide our customers with tremendous
value," Smith said.

"This is the most natural partnership in the world. We have
worked well together for years," Smith continued. "We are
already a team with a successful track record. Bell Atlantic NYNEX
Mobile has shown that we can integrate two independent businesses
efficiently, with consistent and innovative service to customers, fair
treatment of employees and positive financial results for shareholders.
In less than two years, Bell Atlantic NYNEX Mobile has achieved a market
leadership position with innovative products, faster customer growth and
sharply improved profitability.

"Our two companies have a significant global presence, with
major operations in Europe, Asia, Latin America and New Zealand,"
Smith added. "We will build on our new partnership to strengthen
our international businesses. For example, Fiber-optic Link Around the
Globe (FLAG) -- global fiber facilities from the U.K. to Japan, which
NYNEX is now building -- will give us expanded opportunities to enter
into high growth markets."

Seidenberg said, "We must remain strong at home if we are to
compete in the rapidly growing global communications marketplace.
Innovative marketing, quality of service and continuing the development
of a modern network will be our top priorities. In 1995, Bell Atlantic
and NYNEX invested nearly $5 billion in wireline network facilities and
an additional $700 million in our Bell Atlantic NYNEX Mobile wireless
business. The new company will maintain a strong local presence through
investment and employment in the states we serve and will continue our
long-standing traditions of community involvement and corporate

"We are working to implement the vision of the
Telecommunications Act of 1996. We remain committed to opening our own
markets to competition so that we can quickly enter new markets such as
long distance," Seidenberg added.

"We will compete aggressively for the long distance traffic
originating in the Northeast Corridor," said Seidenberg. "With
over $20 billion of long distance traffic originating within our region,
we see this as a significant business opportunity. About 45 percent of
that traffic both originates and terminates within our new region and
could be carried economically over the network of the new Bell Atlantic;
this is a significantly higher volume than the two companies would carry

"We are particularly excited by the opportunities in the
international long distance marketplace. Our customers currently account
for approximately 35 percent of all U.S. international calls, with a high
concentration of traffic moving to and from Canada, Europe and
Japan," Seidenberg added.

The companies expect that, excluding special transition and
integration charges, the merger will be accretive to recurring earnings
per share in the first year after closing. With an expanded presence in
key communications and information markets, the new Bell Atlantic expects
increased opportunities for long-term growth in both revenues and

Recurring expense savings from this proposed business combination
are expected to grow to approximately $600 million annually by the third
year following closing. They will consist of approximately $300 million
in savings from operations systems and other administrative costs and
approximately $300 million in savings from a reduction of 3,000 primarily
corporate and administrative management positions.

Transition and integration charges of $500 million are
anticipated in the first year following the completion of the merger. An
additional $200-400 million in charges are anticipated over the two
succeeding years. Annual capital expenditures for the new company should
reflect approximately $250-$300 million of incremental purchasing
efficiencies. The new company is expected to have total cash savings of
$850-900 million per year. These savings, coupled with new revenue and
margin opportunities in long distance, video and other network services,
are expected to create substantial shareholder value for the new Bell

"We will continue to act responsibly toward our employees,
especially those affected by this merger, and will continue to
aggressively pursue redeployment opportunities for affected
personnel," Seidenberg said. "When we created Bell Atlantic
NYNEX Mobile, we experienced an initial consolidation of jobs followed by
significant marketplace expansion, redeployment and the creation of new

The combined company will retain a strong financial position in
the industry as evidenced by its current combined net cash from
operations of over $7.5 billion. The merger is expected to produce even
stronger cash flow margins through the increase in revenue growth and
reduction of costs. This will facilitate the company's ability to
internally finance its operations, capital expenditures, and dividends
while maintaining a strong credit rating, thereby providing the financial
flexibility to be a major competitor in the industry.

The new company's dividend policy will be determined by its Board
of Directors after closing. It is anticipated that the dividend per
share for the new company will initially be set at $2.36, which is the
current level that NYNEX shareholders receive. Since NYNEX shareholders
will receive one share in the new company for each share of NYNEX stock,
their initial cash dividend is not expected to change. Given that Bell
Atlantic shareholders will receive 1.302 shares in the new company for
each Bell Atlantic share that they own, their equivalent cash dividend is
expected to be effectively $3.07, a 6.7% increase over the current $2.88
per share. The new company will remain committed to providing
competitive dividends to its shareholders, viewing dividends as an
important component of shareholder value.

The new company will organize along customer and service segments
dedicated to consumer, large and small business, network integration,
long distance, federal systems, video and Internet segments, among
others. These lines of business will have considerable autonomy to
improve operating ratios, revenue and margin growth, expense control and
performance results. The new company will drive faster product
development, create new and more efficient distribution channels, and
dramatically improve customer service.

The merger is subject to the approval of the shareholders of both
companies; special shareholder meetings will be held later this year. In
addition, approvals will be required from federal and state agencies.

Merrill Lynch acted as financial advisor and provided a fairness
opinion to Bell Atlantic.

Bear, Stearns & Co. Inc. acted as financial advisor and
provided a fairness opinion to NYNEX. Morgan Stanley & Co.
Incorporated also provided a fairness opinion to NYNEX.

INTERNET USERS: This news release, and other information relating to
this proposed
merger, can be found on the Bell Atlantic NYNEX merger World Wide Web
site ( "http://www.bell-atl.com/nynex">http://www.bell-atl.com/nynex), as
well as
Bell Atlantic's and NYNEX's sites on the World Wide Web ( "http://www.ba.com">http://www.ba.com, "http://www.nynex.com">http://www.nynex.com), on gopher
(gopher://ba.com) or by ftp (ftp://ba.com/pub).

Information contained in this release with respect to the expected
financial impact of the proposed merger is forward-looking. These
statements represent the companies' reasonable judgment with respect to
future events and are subject to risks and uncertainties that could cause
actual results to differ materially. Such factors include: materially
adverse changes in economic conditions in the markets served by the
companies; substantial delay in the expected closing of the merger; and
a significant change in the timing of when the companies expect to be
permitted to offer long distance services within their regions.


*Trademark of Microsoft Corp.

Media contact:

    Bell Atlantic

    Eric Rabe, 215-963-6531

    Shannon Fioravanti, 703-974-1720


    Susan Kraus, 212-395-2355

    David Frail, 212-395-0500