AT&T + BellSouth = US$5.8B Publisher
The story is all over the financial press today that AT&T will acquire BellSouth for US$67 billion. Based on 2005 revenues, the combined Yellow Pages divisions of the two companies will have total revenues of about US$5.8 billion. I’d say this will make it the world’s largest directory publisher, but that was already true of AT&T’s US$3.7 billion Yellow Pages division. The newly enlarged publishing unit will be the incumbent publisher in 21 states.
This deal is not exactly a surprise, since it was widely reported that SBC (before it acquired AT&T and adopted its name) made a run at BellSouth before it pursued the AT&T deal. And AT&T and BellSouth’s Yellow Pages operations already jointly own YellowPages.com, a deal that led to much speculation that it was a precursor to a combined Yellow Pages operation. Well, that now appears to have happened, even if Yellow Pages was not a driving force in the transaction.
We will have a lot more to say about this deal in this week’s Local Media Journal. This is a big one.
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A $29B valuation is too large any single PE player, but a syndicate of a number of players is likely to have enough to buy the operations. Then you drop the phone company brands and use Yellowpages. com as your single and sole brand for print and online.
Here is an article from last year that gave some of the history behind the SBC (AT&T) and BellSouth discussions.