Bell Atlantic shareholders overwhelmingly approve merger
Major milestone passed in alliance with NYNEX
RICHMOND, Va. -- The shareholders of the Bell Atlantic Corp. (NYSE:BEL) have voted overwhelmingly to approve the company's merger with NYNEX Corp. (NYSE:NYN).
In preliminary results tallied from proxies representing 74.1% of the company's 437.8 million outstanding common shares, 97.4% voted to approve the transaction.
Separately, an equally impressive proportion of the outstanding shares of NYNEX were voted in favor of the deal, that company announced after their special shareholders meeting two days ago (November 6, 1996).
Addressing Bell Atlantic shareowners today, Chairman and CEO Ray Smith said, "Your vote today helps to create a great American company, one that will provide greater choice for our customers, greater value for our investors and greater opportunity for our employees."
He cited four reasons why the merger promises strong growth for the future:
- Market Presence. "This merger creates a formidable presence in the most information-intensive region on earth - a region that contains many of the world's premier financial, media, entertainment and political centers," Smith said.
- Scale and Scope. "This merger will create America's largest local exchange carrier and second-largest telecommunications company - a company with enough resources to compete on a global level," he said. Smith noted that domestically, no other company serves as many customers with both a landline and wireless network, and internationally, its ventures in Europe, Latin America and the Pacific Rim will account for some 10% of the value of the combined company.
Synergies. On the revenue side, Smith said, "real growth will come from selling not only connections, but complete packages of high-value services to increasingly sophisticated customers." He vowed the new Bell Atlantic will develop new products faster, create new, more efficient sales and distribution channels, quickly penetrate new business opportunities, and dramatically improve the quality of service to customers.
On the cost side, Smith continued, "we expect this merger to produce annual expense savings of at least $600 million and capital savings of another $250 million to $300 million," primarily by developing single operating systems for the new company and adopting the best practices of both Bell Atlantic and NYNEX.
Strong Management. "This merger will result in one of the strongest management teams in the industry," Smith said. He noted that managers from the two companies have worked together successfully in the past, citing the experience of Bell Atlantic NYNEX Mobile, their already-merged cellular company. "We significantly improved our cellular revenue growth, profitability and service quality, proving that indeed, one plus one can equal three," he said.
"For these reasons, we believe we are building a company that will, without a doubt, be a huge winner in the rapidly converging and globalizing communications marketplace."
With the strongly positive shareholder approval for the merger, the company now will concentrate on the steps remaining to close the deal: the necessary regulatory approvals from the Federal Communications Commission for transfer of NYNEX radio licenses; the ongoing antitrust review by the Department of Justice; and state regulatory commission review. In Bell Atlantic territory, none of the states has indicated the need to approve the merger. In the NYNEX region, remaining state reviews are expected to be complete by early next year.
"In short, the merger process is going smoothly, and we're confident that we will close this merger in the first quarter of 1997," Smith said.
Bell Atlantic Corporation (NYSE: BEL) is at the forefront of the new communications, entertainment and information industry. In the mid-Atlantic region, the company is the premier provider of local telecommunications and advanced services. Globally, it is one of the largest investors in the high-growth wireless communication marketplace. Bell Atlantic also owns a substantial interest in Telecom Corporation of New Zealand and is actively developing high-growth national and international business opportunities in all phases of the industry.