---
title: "AT&T → BellSouth"
url: "https://mahouse.world/ma-deals/at-t-buy-bellsouth-2006"
type: "M&A deal"
year: "2006"
---

# AT&T → BellSouth

AT&T's all-stock purchase of BellSouth, valued at $67bn when agreed in March 2006 and about $86bn when it closed that December, gave AT&T sole control of Cingular Wireless and reunited four of the seven regional Bell companies — after the FCC extracted a network-neutrality pledge as the price of approval.

An all-stock deal that gave AT&T full ownership of Cingular Wireless and reassembled much of the former Bell System.

- **Acquirer:** AT&T (United States)
- **Target:** BellSouth (United States)
- **Value:** $67B
- **Announced:** March 2006
- **Completed:** December 2006
- **Sector:** Telecom
- **Deal type:** acquisition

## Why it mattered

The buyer was the former SBC, the smallest Baby Bell, which had grown by buying Pacific Telesis and Ameritech and in November 2005 bought its former parent, AT&T Corp, for $16bn, taking its name. BellSouth served nine south-eastern states and co-owned with AT&T both Cingular Wireless, the largest US wireless carrier, and Yellowpages.com. "No partnership between two independent companies, no matter how well run," said AT&T's chief executive, Edward Whitacre, could match a solely owned company.

BellSouth's shareholders were offered 1.325 AT&T shares each, worth $37.09 on 3 March 2006 — a 17.9% premium — or about $67bn in all. The companies put the net present value of synergies at nearly $18bn. A rise in AT&T's share price lifted the deal's value to about $86bn by the end of the year.

The Justice Department cleared the merger without conditions on 11 October 2006. At the FCC, the Republican commissioner Robert McDowell stood aside because he had lobbied for Comptel, a trade group opposing the deal; the chairman, Kevin Martin, declared an impasse, and the two Democrats, Michael Copps and Jonathan Adelstein, gained leverage. AT&T conceded network neutrality, stand-alone DSL at $19.95 a month, a four-year cap on special-access rates, the sale of BellSouth's 2.5GHz spectrum and the return of 3,000 offshored jobs. The commission approved the deal unanimously on 29 December 2006, and it closed that day.

## What it left behind

AT&T rebranded Cingular's stores as AT&T in January 2007, and BellSouth's local phone company began trading as AT&T Southeast. The bets that followed ranged further from networks: an attempt to buy T-Mobile was withdrawn in 2011, costing AT&T $3bn in cash and access to $1bn of spectrum; DirecTV cost $48.5bn in 2015 and Time Warner $108.7bn, leaving about $200bn of debt by 2020. Both were unwound — DirecTV spun off with TPG in 2021 and WarnerMedia merged with Discovery — and AT&T now concentrates on 5G and fibre, closing its $5.75bn purchase of Lumen's consumer fibre business on 2 February 2026. Taking full control of an asset the buyer already co-owns carries different risks from buying into an unfamiliar industry: the wireless business consolidated in 2006 remains central to AT&T, while its media purchases were reversed within a few years.

Source: https://en.wikipedia.org/wiki/BellSouth