Plans to merge the second and third largest long-distance
telephone companies in the US, WorldCom and Sprint, have been
scrapped following opposition from both US and European anti-trust
regulators. The merger would have given the companies a large share
of the internet backbone services market.
The merger could not proceed until the companies received
approval from the US and European regulators. The US Department of
Justice announced that a trial to establish whether the proposed
merger was in breach of US laws could not take place before January
2001.
William Esrey, chairman of Sprint expressed his disappointment
over the merger’s failure by stating “while we disagree with the
conclusions reached by the Justice Department on the competitive
impact of the merger, litigation of those conclusions in federal
court is not a realistic alternative”.
The collapse of the deal is expected to have an impact on other
proposed mergers or alliances in the telecommunications industry
both in the US and in Europe.
