The Verizon-MCI Merger

The shareholders of MCI received 0.5743 shares of Verizon for each share of MCI held along with additional cash of US$ 2.738 per MCI share. To achieve the synergies from the merger with MCI, Verizon expected to incur costs of US$ 1.5 billion in expense and US$ 2 billion in capital. On the merger, Seidenberg said, "This milestone for Verizon creates a new competitive force with the power of the global MCI network, and the reach of Verizon's broadband and wireless networks in the United States. Our added network capabilities and strong customer relationships provide a solid foundation for innovative and integrated wireless, wireline and multimedia services designed to meet customer demands for speed, mobility and control."

Financial experts appreciated Verizon's move to acquire MCI through a combination of stock and cash without incurring any debt. Senior personnel at Verizon were of the view that the merger had provided the company financial stability.

According to Gofus, "The newly combined companies are all more financially stable and the whole uncertain future question is just gone. If you're a global company, you need to know your partner is going to be there for the long haul and not be concerned about who's going to buy them."...