SBC in Talks to Acquire AT&T

SBC Communications Inc., the No. 2
U.S. telecommunications company, is in talks to acquire AT&T
Corp. for more than $15 billion to bolster its business with
large corporations, sources familiar with the talks said on
Thursday.

Such a deal would likely spell the end for AT&T, the
once-ubiquitous "Ma Bell" whose history dates back 120 years to
the invention of the telephone. With AT&T retreating from its
consumer business, SBC is interested in AT&T's corporate
clients and international telephone and data networks, the
sources said.

Spokesmen for SBC and AT&T declined to comment.

Combined, the companies would be about the same size as
Verizon Communications Inc., the nation's biggest
telecommunications company. A merger would likely face
antitrust hurdles.

"Regulatory issues are not insurmountable, but we believe
they would create a long and controversial approval process. We
believe the time commitment would reduce the attractiveness of
any effort to get the deal done," said Lehman Brothers analyst
Blake Bath.