Exhibit 99
SBC COMMUNICATIONS INC. AND PACIFIC TELESIS GROUP
ANNOUNCE MERGER AGREEMENT
* Creates Nation's Second Largest Telecommunications Company
*
SAN FRANCISCO, April 1, 1996 -- SBC Communications Inc.
and Pacific Telesis Group today announced a definitive
agreement to merge into a single company uniquely positioned
to thrive in the new, dynamic telecommunications industry.
The merger, the first of its kind between two former
Bell System companies, combines two outstanding
telecommunications companies into a single corporation
serving the nation's two most populous states -- California
and Texas, seven of the country's 10 largest metropolitan
areas and sixteen of the top fifty markets. The companies
serve over 30 million access lines in high growth areas and
have access to over 80 million potential wireless customers
across the country.
(LOGO) SOUTHWESTERN BELL (LOGO) PACIFIC BELL
(LOGO) NEVADA BELL
The company will be known as SBC Communications Inc.
with Edward E. Whitacre Jr. serving as chairman of the board and
chief executive officer. Phil Quigley will be vice-chairman of the
board and second in command; he will continue to operate the successful
exchange operations in California and Nevada. After the
merger, members of the Pacific Telesis board will be asked
to join the SBC board so that they will constitute one-third
of the expanded board.
The combined company will offer products and services
under some of the strongest brands in the industry --
Southwestern Bell, Pacific Bell, Cellular One and Nevada
Bell. Locations served span the nation and include
attractive and growing markets such as Boston, Chicago,
Dallas, Houston, Los Angeles, St. Louis, San Diego, San
Francisco, and Washington, D.C.
Upon completion of the transaction, SBC will have more
than 100,000 employees, revenues of over $21 billion,
operating cash flow of $9 billion, and income of almost
$3 billion. The merger creates the nation's second largest
telecommunications company in terms of market value.
"This merger will combine two of the best
telecommunications companies in the world into a strong
company truly prepared to meet the challenges of the 21st
century," said Whitacre, chairman and chief executive
officer, SBC Communications Inc. "It is a dynamic combination
that will benefit our customers, shareholders and employees."
The merger is partially a product of the changes
occurring in the telecommunications industry. The recent
landmark federal legislation opens up tremendous new
business opportunities for the combined companies and
changes the core telephone industry into a much more
competitive business.
"In this new competitive environment, customer
satisfaction, a strong market presence, efficient and lower-
cost operations, a substantial financial base quality and
new, innovative services will be crucial to success in the
marketplace," said Quigley, chairman, president and chief
executive officer, Pacific Telesis Group. "We believe this
merger will enhance our ability to deliver what customers
want."
The merger involves an exchange of stock with current
Pacific Telesis stockholders receiving SBC stock. Based on
the average of SBC's closing stock prices last week, this
implies a value of approximately $39 for each Pacific
Telesis' share. The exchange ratio has Pacific Telesis
shareowners receiving 0.733 shares of SBC common stock for
each of their shares subject to certain adjustments. For
example, a Pacific Telesis shareowner holding 1,000 shares
of stock will receive 733 shares of SBC stock. After the
tax-free exchange, 66 percent of the combined company's
stock will be retained by SBC shareholders and 34 percent
held by Pacific Telesis investors.
Pacific Telesis will initially maintain its first
quarter dividend of 54.5 cents per share, payable May 1 to
shareowners of record on April 9. As part of the terms of
the agreement, Pacific Telesis will reduce its second
quarter dividend to 31.5 cents per share, which is expected
to be paid August 1.
Strategically, the merger is expected to create a
telecommunications company with an unparalleled focus on the
growing Latin American and Asian markets and enhance the
combined company's ability to successfully compete in the
$75 billion U.S. long-distance market. In addition to
sharing strong inter-region traffic, both companies are
connected to Mexico. More than 50 percent of all
international traffic to Mexico, where SBC has a
strategic business presence and partnership with Telmex, and
20 percent of all international traffic to Asia originates
in locations where the companies have network facilities.
SBC's relationship with Mexico and Latin America, and
Pacific Telesis' Pacific Rim focus will allow strong
marketing to diverse populations in the merged company's
markets.
The company plans to take advantage of SBC's proven
strength in product development, marketing and sales and
Pacific Telesis' network engineering skills, efficiency in
process management and cost containment. Consumers will
benefit from the merger through the integration of the two
companies' resources and skills which will promote
competition and enhance the development of new,
competitively-priced telecommunications, entertainment,
information and interactive products and services.
While the corporate headquarters will be in San
Antonio, Texas, the company will maintain headquarters of
Pacific Bell and Nevada Bell in California and Nevada. In
addition, a new company will be headquartered in California
to provide integrated administrative and support services
for the combined companies. California will be the
headquarters' location for the company's long distance
company, internet company and international operations. The
combined company is committed to creating at least 1,000
jobs in California over what would otherwise have been the
case if the merger had not occurred.
The combined companies' wireless headquarters will be
located in Dallas.
"This historic merger is about growth -- growth in
jobs, markets and services to our customers," Whitacre said.
"It is not about downsizings or reduced employment
opportunities. We see the future of this industry offering
tremendous opportunities and this merger positions the
company to realize these opportunities for our
stakeholders."
The parties hope to complete the transaction by the end
of the year. It must be approved by the California Public
Utilities Commission, the United States Department of
Justice and the Federal Communications Commission. Given
the pro-competition effects of the merger and the fact that
the two companies are not competitors in the local exchange,
long distance or wireless markets, this merger is not
expected to raise any antitrust or competitive issues.
Pacific Telesis (NYSE:PAC) is a diversified
telecommunications corporation based in San Francisco.
Through its Pacific Bell and Nevada Bell subsidiaries, the
corporation offers a wide array of telecommunications
services throughout California and in Nevada, including
directory advertising and publishing. The corporation
serves nearly 15.8 million access lines, including 53,000
that deliver ISDN service. It currently offers Internet
access service to business customers and will expand that to
residential customers in the very near future. Another
subsidiary, Pacific Bell Mobile Services, will offer
personal communications services at the Republican National
Convention in San Diego this year and will initiate
commercial service by year end.
SBC Communications Inc. is one of the world's leading
diversified telecommunications companies and the second
largest wireless communications company based in the United
States. SBC provides innovative telecommunications products
and services under the Southwestern Bell and Cellular One
brands. Its businesses include wireless services and
equipment in the United States and interests in wireless
businesses in Europe, Latin America, South Africa and Asia;
cable television in both domestic and international markets;
and directory advertising and publishing. SBC (NYSE:SBC)
reported 1995 revenues of $12.7 billion.