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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[x] Soliciting Material Pursuant to Rule 14a-12
BELLSOUTH CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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The following materials were used by BellSouth for purposes of providing
information regarding the acquisition of BellSouth by AT&T Inc.
TOP LINE MESSAGES
AT&T/BELLSOUTH MERGER
MARCH 6, 2006
OVERALL MESSAGES
o This union combines two well-respected companies with complementary
strengths and two great brands to create a communications industry
leader in wireline, wireless and broadband solutions, as well as
directory advertising and publishing.
o This combination is good for our employees, our customers, and our
shareowners and builds on the tradition of community service by both
companies.
o This is a strong cultural fit; the companies share a common past and
an ongoing legacy of innovation, integrity, reliability and customer
service. This new company will set the standard in communications for
years to come.
o After closing, the current BellSouth will continue as a regional
operation of AT&T, headquartered in Atlanta; and state headquarters
will remain in each of BellSouth's nine states.
o Cingular headquarters will remain in Atlanta.
o The jobs and work opportunities for the vast majority of BellSouth
employees will be unaffected. There will be some consolidation of
staff and support functions.
o BellSouth will remain a committed and prominent corporate citizen in
the areas where we operate.
o The merger will need approval from company's shareholders, the FCC,
the U.S. Department of Justice, various state regulatory agencies, and
a small number of local and foreign authorities.
We have included or incorporated by reference in this document
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties, and actual results might differ materially from these
statements. Such statements include, but are not limited to, statements
about the benefits of the merger, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of the
management of AT&T Inc. and BellSouth Corporation and are subject to
significant risks and uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY STATEMENT OF
AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL FILE OTHER MATERIALS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INVESTORS ARE URGED TO
READ THE REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT (AND
ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be
able to obtain free copies of the registration and joint proxy statement,
when they become available, as well as other filings containing
information about AT&T and BellSouth, without charge, at the SEC's Web site
(www.sec.gov). Copies of AT&T's filings may also be obtained for free from
AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T
Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies
of BellSouth's filings may be obtained without charge from BellSouth at
BellSouth's Web site (www.bellsouth.com) or by directing a request to
BellSouth at Investor Relations, 1155 Peachtree Street, Atlanta, Georgia
30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration and joint proxy statement, and the other relevant
documents filed with the SEC when they become available.
STATE SPECIFIC QUESTIONS & ANSWERS
AT&T/BELLSOUTH MERGER
MARCH 6, 2006
Q. YOU INDICATE THAT THE JOBS AND WORK OPPORTUNITIES OF THE MAJORITY OF
BELLSOUTH EMPLOYEES WILL BE UNAFFECTED BUT THAT THERE WILL BE SOME
CONSOLIDATION OF STAFF AND SUPPORT FUNCTIONS. HOW MANY EMPLOYEES DO
YOU HAVE IN THIS STATE AND ARE ANY OF THESE EMPLOYEES PART OF
ORGANIZATIONS THAT WILL BE DOWNSIZED/CONSOLIDATED?
A. As of 12/31/05 the total employees per state are:
AL - 7,038 NC - 5,286
FL - 13,590 SC - 2,745
GA - 18,752 TN - 4,750
KY - 2,577
LA - 4,564
MS - 2,616 Company total = 63,100
With the exception of Birmingham and Atlanta, the vast majority of the
employees in each state have operational responsibilities, not staff
or support responsibilities.
Q: WILL THE NEW COMPANY DO AWAY WITH A REGIONAL/LOCAL IDENTITY? WHAT
HAPPENS TO LOCAL COMMUNITY SUPPORT? WILL THE BELLSOUTH PIONEERS GO
AWAY?
A. After closing, the current BellSouth will continue as a regional
operation of AT&T, headquartered in Atlanta; and state headquarters
will remain in each of BellSouth's nine states. In addition, Cingular
headquarters will remain in Atlanta.
Also, the jobs and work opportunities of the vast majority of
BellSouth employees will be unaffected. There will be some
consolidation of staff and support functions.
In addition, the new company has a tradition of community service and
we expect the commitment to our communities will continue. The company
will remain committed to the Pioneers as well.
Q. CAN YOU TELL ME WHAT YOUR TOTAL NETWORK INVESTMENT IS IN EACH OF YOUR
STATES DURING 2005 AND OVER THE LAST 3 YEARS?
A. AL - $288m (2005) and $820m (last 3 yrs) NC - $328m (2005) and $888m (last 3 yrs)
FL - $756m (2005) and $2b (last 3 yrs) SC - $196m (2005) and $519m (last 3 yrs)
GA - $661m (2005) and $1.9b (last 3 yrs) TN - $305m (2005) and $827m (last 3 yrs)
KY - $149m (2005) and $418m (last 3 yrs)
LA - $314m (2005) and $750m (last 3 yrs)
MS - $261m (2005) and $659m (last 3 yrs)
We have included or incorporated by reference in this document
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties, and actual results might differ materially from these
statements. Such statements include, but are not limited to, statements
about the benefits of the merger, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of the
management of AT&T Inc. and BellSouth Corporation and are subject to
significant risks and uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY STATEMENT OF
AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL FILE OTHER MATERIALS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INVESTORS ARE URGED TO
READ THE REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT (AND
ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be
able to obtain free copies of the registration and joint proxy statement,
when they become available, as well as other filings containing
information about AT&T and BellSouth, without charge, at the SEC's Web site
(www.sec.gov). Copies of AT&T's filings may also be obtained for free from
AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T
Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies
of BellSouth's filings may be obtained without charge from BellSouth at
BellSouth's Web site (www.bellsouth.com) or by directing a request to
BellSouth at Investor Relations, 1155 Peachtree Street, Atlanta, Georgia
30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration and joint proxy statement, and the other relevant
documents filed with the SEC when they become available.
TOP LINE MESSAGES
AT&T/BELLSOUTH MERGER
STATE REGULATORY & EXTERNAL AFFAIRS
MARCH 6, 2006
OVERALL MESSAGES
----------------
o This union combines two well-respected companies with complementary
strengths and two great brands to create a communications industry
leader in wireline, wireless and broadband solutions, as well as
directory advertising and publishing.
o This combination is good for our employees, our customers, and our
shareowners and builds on the tradition of community service by both
companies.
o This is a strong cultural fit; the companies share a common past and
an ongoing legacy of innovation, integrity, reliability and customer
service. This new company will set the standard in communications for
years to come.
o After closing, the current BellSouth will continue as a regional
operation of AT&T, headquartered in Atlanta; and state headquarters
will remain in each of BellSouth's nine states.
o Cingular headquarters will remain in Atlanta.
o The jobs and work opportunities for the vast majority of BellSouth
employees will be unaffected. There will be some consolidation of
staff and support functions.
o BellSouth will remain a committed and prominent corporate citizen in
the areas where we operate.
o The merger will need approval from company's shareholders, the FCC,
the U.S. Department of Justice, various state regulatory agencies, and
a small number of local and foreign authorities.
###
We have included or incorporated by reference in this document
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties, and actual results might differ materially from these
statements. Such statements include, but are not limited to, statements
about the benefits of the merger, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of the
management of AT&T Inc. and BellSouth Corporation and are subject to
significant risks and uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY STATEMENT OF
AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL FILE OTHER MATERIALS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INVESTORS ARE URGED TO
READ THE REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT (AND
ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be
able to obtain free copies of the registration and joint proxy statement,
when they become available, as well as other filings containing
information about AT&T and BellSouth, without charge, at the SEC's Web site
(www.sec.gov). Copies of AT&T's filings may also be obtained for free from
AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T
Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies
of BellSouth's filings may be obtained without charge from BellSouth at
BellSouth's Web site (www.bellsouth.com) or by directing a request to
BellSouth at Investor Relations, 1155 Peachtree Street, Atlanta, Georgia
30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration and joint proxy statement, and the other relevant
documents filed with the SEC when they become available.
[LOGO - at&t] [LOGO - BELLSOUTH (R)]
AT&T AND BELLSOUTH TO MERGE
THIS MERGER TAKES PLACE IN THE FACE OF RAPIDLY EVOLVING TECHNOLOGY, SERVICE
CONVERGENCE, AND EVER-INTENSIFYING MARKETPLACE COMPETITION. THE MERGER IS
THE RIGHT COMBINATION AT THE RIGHT TIME.
o It combines two of America's most respected companies, companies with
complementary strengths and a heritage of integrity, exceptional
customer service, and premier network and technical competencies.
o Together, these companies will help make America's communications and
entertainment infrastructure equal or surpass the most advanced
networks in the world today.
THE MERGER OF AT&T AND BELLSOUTH WILL ENHANCE THE RESILIENCY AND
RESTORABILITY OF ESSENTIAL NATIONAL INFRASTRUCTURE. THE MERGER ENHANCES
NATIONAL SECURITY BY STRENGTHENING A DIVERSE TELECOMMUNICATIONS NETWORK AND
PRESERVING UNPARALLELED WIRELESS AND WIRELINE CAPABILITIES IN THE UNITED
STATES.
o The merger will make available to BellSouth increased capital to
invest in infrastructure in BellSouth's region, including investments
to restore and enhance telecommunications infrastructure destroyed by
Hurricane Katrina.
THE MERGER OF AT&T AND BELLSOUTH WILL DRIVE THE NEXT EVOLUTION IN WIRELESS
TECHNOLOGY AND HEIGHTEN WIRELESS COMPETITION.
o As technology and the marketplace evolve, the merger is needed to
foster investment in and further evolution of the Cingular Wireless
business, a joint venture of AT&T and BellSouth.
> Governance of Cingular requires consensus between AT&T and
BellSouth because voting control of Cingular is split equally
between both companies.
> Given that AT&T and BellSouth remain independent companies with
diverse interests, the consensus required to operate Cingular
increasingly will lead to delays in decisionmaking and conflicts
over crucial matters such as optimal investment levels, branding,
marketing, service offers, technology, etc.
> The separation of Cingular from both its parents also prevents
integration of its network and offerings with those of its
parents' wireline and broadband networks, something important to
the future development of the industry.
o The merger will enable AT&T and BellSouth to create a single IP-based
network from the three separate networks of Cingular, BellSouth, and
AT&T. This single network will generate efficiencies and innovations
that would not occur absent the merger. This will:
> speed the next evolution in wireless technology as the combined
companies implement a common architecture that supports both
wireless and wireline services and products, enabling the
integration, for example, of wireless offerings with Web-based
VoIP capabilities and of video capabilities with wireless
handsets;
> simplify customer service offers by permitting the integrated
offering and billing of wireless and wireline services under a
unified brand;
> intensify wireless competition with other providers, including
Sprint/Nextel, which is integrating wireline and wireless
services for business customers, the already integrated Verizon
Wireless, and T Mobile, which is focused on the consumer segment.
o The merger fully reunites the inventor of cellular technology, AT&T
Labs, with a wireless provider and network to foster even greater
innovation in the future.
THE MERGER OF AT&T AND BELLSOUTH WILL ALSO EXPAND VIDEO COMPETITION AND
BRING LOWER RATES AND ENHANCED CONTROL OF T.V. PROGRAMMING TO MORE
CONSUMERS.
o Consumers will benefit because the merger will allow AT&T to extend
competitive, interactive video services to BellSouth's service
territory faster than would likely occur but for the merger.
> While AT&T has committed to deploy competitive interactive video
services throughout its service territory, BellSouth has yet to
decide whether or to what extent to deploy such services.
> The merger will eliminate any uncertainty and support a faster
and broader deployment of alternative video services to millions
of consumers in BellSouth's region than would otherwise occur.
> As the GAO found and the FCC recognized just last week, video
competition from a broadband service provider reduces rates (23%
on average for basic cable) and improves service quality.
o The broader reach made possible by the merger will enable the combined
company to obtain essential programming services on more flexible
terms than otherwise would be possible. This will permit more
effective competition with incumbent video distributors and service
offerings more responsive to consumer needs.
o The merger will also enhance opportunities for program diversity by
creating a more effective alternative distribution outlet that will
reduce concentration and buying power among incumbent video
distributors and reach a larger base of customers to support new
programming.
THE MERGER OF AT&T AND BELLSOUTH WILL ALSO EXPAND BROADBAND DEPLOYMENT.
o Economies of scope achieved in the provision of voice, data, video,
and wireless services to more consumers will improve the economics of
broadband deployment.
> When AT&T received video franchising authority from the Texas
PUC, the enhanced economies enabled AT&T to announce deployment
of broadband technology to every wire center in Texas.
> As the local authorization process is reformed, these same
economies would enable the combined company to deploy broadband
to more consumers throughout the combined companies' service
territory.
o The merger will enhance efforts to bring broadband to rural areas by
enabling the combined companies to spread the research and development
costs of wireless broadband technologies over a broader base of
customers.
THE MERGER OF AT&T AND BELLSOUTH WILL ALSO CREATE ENORMOUS EFFICIENCIES IN
THE DELIVERY OF VOICE, DATA, AND VIDEO SERVICES.
o The merger will create $18 billion in synergies.
o These savings will financially strengthen the combined company,
enhance its ability to invest, and translate into heightened
competition, rapidly improving technologies and services, and
increased savings for consumers.
THE MERGER WILL ONLY ENHANCE COMPETITION AND BENEFIT CONSUMERS.
o It will create a provider better able to innovate, invest, and compete
as it enters new markets and faces the challenge of rapidly evolving
technology, service convergence, and ever-intensifying competition in
its traditional markets from an array of nontraditional providers.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
We have included or incorporated by reference in this document financial
estimates and other forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These estimates and
statements are subject to risks and uncertainties, and actual results might
differ materially from these estimates and statements. Such estimates and
statements include, but are not limited to, statements about the benefits
of the merger, including future financial and operating results, the
combined company's plans, objectives, expectations and intentions, and
other statements that are not historical facts. Such statements are based
upon the current beliefs and expectations of the management of AT&T Inc.
and BellSouth Corporation and are subject to significant risks and
uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaims any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY
STATEMENT/PROSPECTUS OF AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL
FILE OTHER MATERIALS WITH THE SECURITIES AND EXCHANGE COMMISSION (THE
"SEC"). INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, INCLUDING
THE JOINT PROXY STATEMENT (AND ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND
OTHER MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain free copies of the
registration statement and joint proxy statement, when they become
available, as well as other filings containing information about AT&T and
BellSouth, without charge, at the SEC's Web site (www.sec.gov). Copies of
AT&T's filings may also be obtained without charge from AT&T at AT&T's Web
site (www.att.com) or by directing a request to AT&T Inc. Stockholder
Services, 175 E. Houston, San Antonio, Texas 78258. Copies of BellSouth's
filings may be obtained without charge from BellSouth at BellSouth's Web
site (www.bellsouth.com) or by directing a request to BellSouth at Investor
Relations, 1155 Peachtree Street, N.E., Atlanta, Georgia 30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration statement and joint proxy statement, and the other
relevant documents filed with the SEC when they become available.
Quick Reference Guide
CALLS FROM THE NEWS MEDIA
PLEASE REMEMBER: BellSouth has designated spokespersons who are authorized
to discuss merger-related issues with the news media. ALL requests from the
news media for interviews, comments, information, etc., related to the
merger should be referred to JOE CHANDLER AT 404-312-1964.
FOR EMPLOYEES WHO TALK TO CUSTOMERS:
BellSouth and AT&T announced today that the two companies will merge,
pending necessary approvals. Prior to the closing, the merger will not
affect your current relationship with BellSouth or the services we provide
you. We remain committed to providing the superior customer service you
have always been able to rely on.
Upon closing, the merger will result in significant benefits for our
customers through faster access to new and advanced services, expanded
service capabilities and state-of-the-art networks.
The merger is expected to close within 12 months. Additional information
about the proposed merger will continue to be available on our Web site at
www.bellsouth.com.
FOR EMPLOYEES/VENDORS WHO TALK TO RETIREES:
BellSouth and AT&T announced today that the two companies will merge,
pending necessary approvals.
The BellSouth pension plans will not change as a result of the merger
agreement. Individuals who receive pensions will continue to receive their
monthly pension annuities in accordance with the terms of BellSouth's
pension plans. By law, companies cannot reduce or eliminate an accrued and
vested pension benefit under tax-qualified plans, such as BellSouth's. In
addition, BellSouth's pension plans are well funded. Any decisions
regarding the pension plans after the merger closes will be made by AT&T.
BellSouth's retiree benefit plans will continue "business as usual" through
the closing. As always, these plans are subject to future amendments.
The merger is expected to close within 12 months. Additional information
about the proposed merger will continue to be available on our Web site at
www.bellsouth.com.
FOR BENEFITS SERVICE CENTER AND FORCE MANAGEMENT HOTLINE:
BellSouth and AT&T announced today that the two companies will merge,
pending necessary approvals.
Prior to closing, BellSouth does not intend to terminate or reduce its
overall benefits and compensation programs as a result of the pending
merger. Benefit plans and compensation programs in general will continue
"business as usual" until the closing.
Terms and conditions of current labor agreements will be assumed by the new
company after the closing. Prior to closing, surpluses will continue,
consistent with the terms of the labor agreements. We do not expect any
significant reduction in craft employees as a result of the closing of the
transaction. The current agreements with CWA will continue until their
expiration dates.
The 2005 bonus payments and CAD increases will proceed as planned, and on
schedule. Bonuses will be paid on March 15. Management salary increases
will be effective May 1.
The terms of the current voluntary management severance offer were not
changed by the merger agreement. Those individuals currently impacted by
the voluntary offer should expect to receive additional communications in
the next few days.
We have included or incorporated by reference in this document
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties, and actual results might differ materially from these
statements. Such statements include, but are not limited to, statements
about the benefits of the merger, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of the
management of AT&T Inc. and BellSouth Corporation and are subject to
significant risks and uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY STATEMENT OF
AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL FILE OTHER MATERIALS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INVESTORS ARE URGED TO
READ THE REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT (AND
ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be
able to obtain free copies of the registration and joint proxy statement,
when they become available, as well as other filings containing
information about AT&T and BellSouth, without charge, at the SEC's Web site
(www.sec.gov). Copies of AT&T's filings may also be obtained for free from
AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T
Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies
of BellSouth's filings may be obtained without charge from BellSouth at
BellSouth's Web site (www.bellsouth.com) or by directing a request to
BellSouth at Investor Relations, 1155 Peachtree Street, Atlanta, Georgia
30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration and joint proxy statement, and the other relevant
documents filed with the SEC when they become available.
SUMMARY OF BELLSOUTH-AT&T MERGER
---------------------------- -------------------------------------------------
RATIONALE It is good for customers, shareholders and
employees.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
TRANSACTION $67 billion in an all stock transaction. As a
result, of the transaction, BellSouth will
merge into, and become a wholly owned
subsidiary of, AT&T.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
EXCHANGE BellSouth shareholders will receive 1.325
shares of AT&T common stock for each BellSouth
share that they hold.
Based on AT&T's stock price at the close of
trading on March 3, 2006, this exchange ratio
equals $37.08 per share, which represents
17.9% premium above the closing price of
BellSouth's price on March 3.
The transaction is expected to be tax-free to
BellSouth shareholders.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
POST-CLOSING OWNERSHIP After the closing, BellSouth's shareholders
will own 38% of the combined company, and
AT&T's shareholders will hold 62% of the
combined company. Three members of BellSouth's
Board of Directors will be elected to AT&T's
Board of Directors.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
DIVIDEND AT&T's current annual dividend is $1.33.
Following the closing, we expect this to
result in the equivalent of a $1.76 dividend
for each outstanding BellSouth share, a 52%
increase to BellSouth's current dividend.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
EXPECTED CLOSE Within approximately 12 months
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
APPROVALS Approvals required from DOJ, FCC, state PSCs
and various local and foreign authorities. In
addition, the proposed merger must be approved
by the shareholders of both AT&T and BellSouth.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
BREAKUP FEE $1.7 billion, payable by either party under
specified circumstances
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
FINANCIAL EXPECTATIONS AT&T and BellSouth expect the proposed
transaction to yield a net present value of
more than $18 billion in synergies, net of the
costs to achieve them.
The synergies are expected to have an eventual
net annual run rate of $2 billion or greater.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
HEADQUARTERS San Antonio, Texas. AT&T's Southeast regional
operations will be headquartered in Atlanta,
Georgia.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
EMPLOYEES Headquarters staff, support functions and
overlapping operations will be consolidated
after the merger closes. For employees that
leave the combined company involuntarily,
there will be an enhanced separation plan.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
IMPACT ON CINGULAR Cingular will become a wholly owned subsidiary
of AT&T. AT&T has agreed to maintain
Cingular's corporate headquarters in Atlanta,
Georgia.
---------------------------- -------------------------------------------------
---------------------------- -------------------------------------------------
We have included or incorporated by reference in this document
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties, and actual results might differ materially from these
statements. Such statements include, but are not limited to, statements
about the benefits of the merger, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions, and other statements that are not historical facts. Such
statements are based upon the current beliefs and expectations of the
management of AT&T Inc. and BellSouth Corporation and are subject to
significant risks and uncertainties and outside of our control.
The following factors, among others, could cause actual results to differ
from those described in the forward-looking statements in this document:
the ability to obtain governmental approvals of the merger on the proposed
terms and schedule; the failure of AT&T shareholders to approve the
issuance of AT&T common shares or the failure of BellSouth shareholders to
approve the merger; the risk that the businesses of AT&T and BellSouth will
not be integrated successfully or as quickly as expected; the risk that the
cost savings and any other synergies from the merger, including any savings
and other synergies relating to the resulting sole ownership of Cingular
Wireless LLC may not be fully realized or may take longer to realize than
expected; disruption from the merger making it more difficult to maintain
relationships with customers, employees or suppliers; and competition and
its effect on pricing, spending, third-party relationships and revenues.
Additional factors that may affect future results are contained in AT&T's,
BellSouth's, and Cingular Wireless LLC's filings with the Securities and
Exchange Commission ("SEC"), which are available at the SEC's Web site
(http://www.sec.gov). Neither AT&T nor BellSouth is under any obligation,
and each expressly disclaim any obligation, to update, alter or otherwise
revise any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information, future
events or otherwise.
NOTE: IN CONNECTION WITH THE PROPOSED MERGER, AT&T INTENDS TO FILE A
REGISTRATION STATEMENT ON FORM S-4, INCLUDING A JOINT PROXY STATEMENT OF
AT&T AND BELLSOUTH, AND AT&T AND BELLSOUTH WILL FILE OTHER MATERIALS WITH
THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC"). INVESTORS ARE URGED TO
READ THE REGISTRATION STATEMENT, INCLUDING THE JOINT PROXY STATEMENT (AND
ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER MATERIALS WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be
able to obtain free copies of the registration and joint proxy statement,
when they become available, as well as other filings containing
information about AT&T and BellSouth, without charge, at the SEC's Web site
(www.sec.gov). Copies of AT&T's filings may also be obtained for free from
AT&T at AT&T's Web site (www.att.com) or by directing a request to AT&T
Inc. Stockholder Services, 175 E. Houston, San Antonio, Texas 78258. Copies
of BellSouth's filings may be obtained without charge from BellSouth at
BellSouth's Web site (www.bellsouth.com) or by directing a request to
BellSouth at Investor Relations, 1155 Peachtree Street, Atlanta, Georgia
30309.
AT&T, BellSouth and their respective directors and executive officers and
other members of management and employees are potential participants in the
solicitation of proxies in respect of the proposed merger. Information
regarding AT&T's directors and executive officers is available in AT&T's
2005 Annual Report on Form 10-K filed with the SEC on March 1, 2006 and
AT&T's preliminary proxy statement for its 2006 annual meeting of
stockholders, filed with the SEC on February 10, 2006, and information
regarding BellSouth's directors and executive officers is available in
BellSouth's 2005 Annual Report on Form 10-K filed with the SEC on February
28, 2006 and BellSouth's proxy statement for its 2006 annual meeting of
shareholders, filed with the SEC on March 3, 2006. Additional information
regarding the interests of such potential participants will be included in
the registration and joint proxy statement, and the other relevant
documents filed with the SEC when they become available.