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.14 Jul 2000
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.