SBC To Acquire AT&T

Note: a conference call to discuss the SBC-AT&T combination will
be broadcast live via the Internet at 9 a.m. EST on Jan. 31, 2005, at
www.sbc.com/investor_relations and www.att.com/ir

• $16 billion transaction brings together industry leaders with
          highly complementary strengths and customer bases



• Combines AT&T's national and global IP-based networks and
          expertise with SBC's strong local exchange, broadband and
          wireless assets



• New company to accelerate customer transition to advanced IP
          solutions and services



• Significant synergies expected to make transaction cash flow
          positive in 2007 and generate earnings per share growth in
          2008
  

SBC Communications Inc. (NYSE:SBC - News) and AT&T (NYSE:T - News) announced
today an agreement for SBC to acquire AT&T, a combination that creates
the nation's premier communications company with unmatched global
reach.

The transaction combines AT&T's global systems capabilities,
business and government customers, and fast-growing Internet protocol
(IP)-based business with SBC's extraordinary local exchange, broadband
and wireless solutions. Both companies have common values focused on
customer service, innovation and reliability.

The combined company will have robust, high-quality network
assets, both in the United States and around the globe, and
complementary expertise and capabilities. It will have the resources
and skill sets to innovate and more quickly deliver to customers the
next generation of advanced, integrated IP-based wireline and wireless
communications services.

For SBC, the combination provides immediate global leadership in
the enterprise segment where corporations and governments require
complex communication solutions and services and access to advanced
national and global networks.

Under terms of the agreement, approved by the boards of directors
of both companies, shareholders of AT&T will receive total
consideration currently valued at $19.71 per share, or approximately
$16 billion.

AT&T shareholders will receive 0.77942 shares of SBC common stock
for each common share of AT&T. Based on SBC's closing stock price on
Jan. 28, 2005, this exchange ratio equals $18.41 per share. In
addition, at the time of closing, AT&T will pay its shareholders a
special dividend of $1.30 per share. The stock consideration in the
transaction is expected to be tax-free to AT&T shareholders.