SCHEDULE 14A INFORMATION
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 Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
U S WEST, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(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):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / 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:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
Merger Information
[U S WEST LOGO]
[Qwest LOGO]
[GRAPHICS: PHOTOS OF A TELEPHONE, A WRITING ELEMENT IN HAND, A LAP-TOP
COMPUTER, AND A WOMAN]
Vote for the merger of U S WEST and Qwest Communications to create a
telecommunications powerhouse for the new millennium
[PHOTO OF SOL TRUJILLO]
Dear Fellow Shareowners:
On July 18, we announced our intent to merge with Qwest Communications. The
shareowner meeting to approve the merger is on November 2, 1999.
This strategic merger will create an aggressive competitor that will offer
customers in the U.S. and around the world more choice and greater access to
next-generation broadband Internet and telecommunications services. The
combined company will create solid growth for shareowners and reliable,
unique solutions for residential and business customers. Together, Qwest and
U S WEST will create a telecommunications powerhouse with end-to-end reach,
innovative products, integrated wireline and wireless services, and cutting
edge broadband and Internet capabilities.
While the merger is subject to regulatory approvals that do not contain
significant conditions, your U S WEST Board of Directors believes that the
merger is in the best interest of U S WEST and its shareowners. It
unanimously recommends a vote FOR approval of the merger.
The enclosed joint proxy provides a comprehensive review of the proposed
merger. I urge you to read it carefully and vote your proxy. To approve the
merger agreement, we must receive the affirmative votes of the owners of a
majority of the outstanding common stock of U S WEST. Not voting or
abstaining has the same effect as a vote against the merger. This brochure
provides an overview of the merger and its resulting benefits. I hope you
find it useful. If you have questions, please call 1-800-735-3568.
Sincerely,
/S/ SOLOMON D. TRUJILLO
Solomon D. Trujillo
Chairman, President and CEO
U S WEST, Inc.
Please Note: This brochure is not part of the Joint Proxy
Statement/Prospectus of Qwest and U S WEST, and is qualified by reference to
that document. This insert does not contain all the information that is
important to you in deciding whether to approve the merger. You should
review the Joint Proxy Statement/Prospectus carefully before making any
decision regarding the merger.
A telecommunications powerhouse for the new millennium
ABOUT U S WEST
[U S WEST Logo]
NYSE symbol: USW
Headquarters: Denver, Colorado
More than 25 million customers
55,000 + employees
1.7 million-mile fiber optic network connecting customers in 14 states
BUSINESSES:
- - Voice
- - Data
- - Internet
- - PCS Wireless
- - Directories
- - Video
1999 Est. Revenues: $13.2 billion
Shares Outstanding: 505 million
ABOUT QWEST
[QWEST LOGO]
NASDAQ symbol: QWST
Headquarters: Denver, Colorado
4 million customers worldwide
9,300 employees
1.3 million-fiber-mile network connecting customers throughout the world,
including an 18,815-U.S.-route mile network, an 8,100-mile Pan-European
network (through KPNQwest joint venture), and fiber networks in Mexico and to
Japan.
BUSINESSES:
- - Broadband Internet-based data, voice, image communications
- - Internet-based, end-to-end application services, hosting and management
solutions
1999 Est. Revenues: $3.6 billion
Shares Outstanding: 746 million
[MAP OF U S WEST REGION, QWEST FIBER NETWORK, AND UNDERSEA CAPACITY]
COMBINED COMPANY PROFILE
EQUITY VALUE
U S WEST $36.5B
($69.00/share transaction value)
Qwest $28.5B
($35.00/share as of 7/16/99)
Combined $65.0B
REVENUE (1999 EST.)
U S WEST $13.2B
Qwest $3.6B
Combined $16.8B
REVENUE GROWTH RATE
(99 est. vs. 98)
U S WEST 6.5%
Qwest 21% (pro forma)
Combined 15-17% target
(2000-2005 CAGR)
FIBER MILES
U S WEST 1.7M U.S.
Qwest 1.3M worldwide
Combined 3.0M worldwide
ANTICIPATED BENEFITS OF A U S WEST/QWEST COMBINATION
Qwest and U S WEST will:
- - Be an aggressive competitor, offering more choice and greater access to
next-generation broadband Internet and telecommunications services.
- - Create a targeted compounded annual revenue growth rate of approximately
15-17 percent and a targeted compounded annual EBITDA growth rate of
approximately 20 percent from 2000-2005.
- - Create a telecommunications powerhouse with end-to-end reach, innovative
solutions and integrated wired and wireless capabilities.
- - Create a benchmark, large-cap growth company for the new millennium.
- - Realize net synergies of $10.5 to $11 billion from 2000-2005, following
completion of the merger.
- - Link one of the nation's most advanced fiber-optic networks to 29 million
customers-with more bandwidth than the AT&T, Sprint and MCI WorldCom networks
combined.
QUESTIONS AND ANSWERS
ABOUT THE MERGER OF U S WEST AND QWEST
WHAT AM I BEING ASKED TO VOTE FOR?
You are being asked to approve the merger between U S WEST, Inc. and Qwest
Communications International Inc., announced on July 18, 1999. We believe
that this strategic merger will create an aggressive competitor capable of
offering customers in the U.S. and worldwide more choice and greater access
to next-generation broadband Internet and telecommunications services.
WHY SHOULD I VOTE FOR THE MERGER?
Your board and management believe that the merger of U S WEST and Qwest will
enable both companies to achieve their mutual goals more quickly than either
company could on its own. We believe that the merger will create a stronger
competitor in the communications/Internet sector and will provide significant
value for our shareowners, employees and customers
HOW WILL I BENEFIT AS A SHAREOWNER?
We expect the combined company to realize synergies that will speed our
ability to compete effectively at the top tier of the telecommunications
industry. Among other benefits, the merger is expected to create a stronger,
larger company with:
- $18.5 billion pro forma year-2000 revenue
- $7.4 billion pro forma year-2000 EBITDA (earnings before interest,
taxes, depreciation and amortization)
- net synergies of approximately $10.5 billion to $11 billion from
2000-2005
The combined company will offer innovative products and end-to-end integrated
wireline and wireless services and broadband Internet capabilities.
WHAT WILL U S WEST SHAREOWNERS RECEIVE FOR THEIR SHARES?
As of the effective date of the merger, U S WEST shareowners will receive a
number of shares of Qwest common stock equal to $69. This consideration is
subject to a collar and could include a cash component. Please refer to
Chapter One of the Joint Proxy Statement/Prospectus under the heading
"Merger Consideration" for a full explanation of the consideration to be
received in the merger.
WHAT HAPPENS TO MY FUTURE DIVIDENDS?
This merger is about growth. We believe it will deliver greater shareowner
value in the long term. U S WEST currently intends to pay dividends
consistent with its current practice until the merger closes. After the
close, Qwest initially intends to pay a quarterly dividend equal to $0.0125
per share. Please note the dividend policy at U S WEST prior to the merger,
and Qwest after the merger, is subject to change by either company consistent
with the terms of the merger agreement. The combined company intends to
capitalize on the tremendous growth opportunities in the
communications/Internet sector by retaining a large portion of its earnings
to reinvest in its businesses. We believe we
can achieve greater long-term shareowner value by reinvesting earnings.
Reducing the dividend will help free up more than $1 billion annually to grow
the business.
WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO SHAREOWNERS?
As a general rule, holders of U S WEST common stock will not realize any gain
or loss for federal income tax purposes for the Qwest shares they receive in
the merger. However, shareowners may realize a gain or loss on the cash
portion if Qwest and U S WEST elect to pay a portion of the merger
consideration in cash. This is possible if Qwest's average price is less
than $38.70 at the close of the transaction. Specific information about
federal income tax consequences of the merger to U S WEST shareowners can be
found in Chapter One of the Proxy Statement/Prospectus under the heading
"Material Federal Income Consequences of the Merger."
WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
We hope to complete the merger by mid-year 2000. In addition to shareowner
approvals, we must also obtain regulatory approvals at the Federal
Communications Commission and in a number of states.
WHAT DO I NEED TO DO NOW?
You can vote in one of four ways:
- by telephone
- through the mail
- via the Internet
- in person at the meeting
In order to assure that we obtain your vote, please vote now even if you plan
to attend the meeting in person. (See your proxy card for instructions.)
WHAT HAPPENS IF I DON'T VOTE?
To approve the merger agreement, we must receive the affirmative votes of the
owners of a majority of the outstanding common stock of U S WEST. Not voting
or abstaining has the same effect as a vote against the merger.
WHAT IS GOING TO MAKE THE COMPANY A TELECOMMUNICATIONS POWERHOUSE?
Due to recent competitive, technological and regulatory changes within our
industry, the most effective competitors will be those companies that offer
the most complete array of products and services without geographic
limitations. We expect to bring together Qwest's advanced network and
broadband Internet service capability with U S WEST's innovative local
communications and broadband Internet access capability to form the benchmark
large-capitalization growth company in the communications/Internet sector for
the new millennium.
IMPORTANT SHAREOWNER INFORMATION
Dividend Change
The merger agreement calls for a reduction in the dividend paid to U S WEST
shareowners. The existing $0.535 per share quarterly dividend of U S WEST
will be reduced to $0.0125 per share for the combined company upon closing.
This will have the effect of shifting the return on your investment from
dividend income to capital appreciation.
Both U S WEST and Qwest stocks have shown great price appreciation since
1997--with U S WEST rising approximately 90 percent since Jan. 1, 1997, and
Qwest rising more than 400 percent since going public in June 1997. Prior to
closing, we currently intend to continue paying the existing $0.535 per share
quarterly dividend.
Please note that the dividend policy at U S WEST prior to the merger, and
Qwest after the merger, is subject to change by either company consistent
with the terms of the merger agreement.
MERGER TERMS AND IMPORTANT INFORMATION
U S WEST shareowners will receive shares of Qwest common stock in exchange
for their U S WEST shares in an amount equal to $69. This consideration is
subject to a "collar", as illustrated below, and may include a cash
component. For example, if Qwest's stock price is $34.50 at the close
(within the collar), U S WEST shareowners would receive two Qwest shares for
each U S WEST share, subject to a cash component. During August 1999, U S
WEST stock traded between $57.625 and $52.25 per share. Based on this share
price, the $69 price per U S WEST share under the merger agreement represents
between a 17 and 24 percent premium to U S WEST's trading price in August.
Please refer to Chapter One of the Joint Proxy Statement / Prospectus under
the heading "Merger Consideration" for a full explanation of the
consideration to be received in the merger.
EXPLANATION OF "THE COLLAR"
[LINE GRAPH DESCRIBING U S WEST'S PER SHARE VALUE AND QWEST'S AVERAGE
PRICE CONCERNING "THE COLLAR".]
Notes:
1. The number of Qwest shares to be issued for each U S WEST share will be
determined by dividing $69 by the average of the daily volume weighted
average prices of Qwest common stock for 15 randomly selected trading days
over a 30-day measurement period ending 3 days before closing the
transaction.
2. Part of Qwest's obligation to shareowners may be satisfied with cash if
Qwest's average price is below $38.70 per share.
3. U S WEST may terminate the merger agreement if the closing price of
Qwest's shares is below $22 for 20 consecutive trading days before the
closing or if the average Qwest share price during the measurement period is
less than $22.
A LARGE-CAP TELECOMMUNICATIONS COMPANY POSITIONED FOR GROWTH
The merger creates a new, combined $65 billion company (based on the July 16,
1999 Qwest closing price and U S WEST's $69-per-share transaction value) with
approximately 64,000 employees, more than 29 million customers, and 3.0
million worldwide fiber miles.
The new entity will have an "Office of the Chairman", represented by three
leaders. Philip F. Anschutz will serve as non-executive Chairman. Joseph P.
Nacchio will continue as Chairman and CEO of Qwest. Solomon D. Trujillo, now
Chairman, President and CEO of U S WEST, will be a Chairman of Qwest and
President of the combined company's broadband local and wireless division.
The combined company will be called Qwest Communications International Inc.
and will be listed on the Nasdaq National Market under the trading symbol
"QWST".
The merger vote will take place at the U S WEST shareowner meeting at New
York City's Equitable Building at 9 a.m. on November 2, 1999.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Some of the information presented in this brochure or incorporated by
reference constitutes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Please refer to
Chapter Four of the Proxy Statement / Prospectus under the heading
"Information Regarding Forward-Looking Statements" for a discussion of
factors that could cause actual results to differ from expectations. Please
also refer to Chapter One of the Proxy Statement / Prospectus under the
heading "Risk Factors" for a discussion of risk factors.
These materials include analysts' estimates and other information prepared by
third parties for which the companies assume no responsibility. The
companies undertake no obligation to review or confirm analysts' expectations
or estimates or to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
For answers to other questions or for more information, please refer to your
proxy, or call our proxy solicitor, D.F. King & Co., Inc., at 1-800-735-3568.
A roadmap to completion
July 18
Qwest Communications and U S WEST announce strategic merger to create $65
billion worldwide company
August 13
Qwest Communications and U S WEST make key federal filings for merger approval
August 19
SEC decides not to review Proxy Statement / Prospectus
Late August/Early September
Qwest, U S WEST file with FCC and seven states for approval of the merger
Early September
U.S. Department of Justice grants anti-trust approval
September
Proxy mailed to U S WEST shareowners
November 2
Qwest and U S WEST hold shareowner meetings
Mid-2000
Anticipated completion of merger*
Mid-2000
Distribution of new Qwest shares to U S WEST shareowners
*Pending regulatory approvals that do not contain significant conditions.
After careful review and consideration, your Board of Directors has
unanimously approved the Merger Agreement, and recommends a vote FOR approval
of the merger.
We urge you to carefully review the Joint Proxy Statement/Prospectus and then
vote FOR, sign and date the enclosed proxy card and return it today in the
postage-paid envelope provided. Remember, not voting or abstaining will have
the same effect as voting against the merger.
[GRAPHICS: PHOTOS OF A TELEPHONE, A WRITING ELEMENT IN HAND, A LAP-TOP
COMPUTER, AND A WOMAN]
[U S WEST LOGO]
[QWEST LOGO]
IMPORTANT VOTING INFORMATION
Whether or not you plan to attend the special meeting of shareowners, please
vote today.
If you have any questions, or need further assistance, please call our proxy
solicitor, D. F. King & Co., Inc., at 1-800-735-3568.
You have a number of options for voting your proxy:
BY PHONE: You can call the toll-free number listed on your proxy voting
card.
BY MAIL: You can return the enclosed proxy card through the mail.
BY INTERNET: You can vote electronically over the Internet. Follow the
instructions on your proxy voting card to find the appropriate web address to
cast your ballot.
IN PERSON: You can vote in person at the U S WEST shareowner meeting at
New York City's Equitable Building at 9 a.m. on November 2.
Thank you for your support.