MCI WorldCom → Sprint
The deal that would have created the world's largest telecoms carrier — blocked in Washington and Brussels, then rendered moot when the acquirer itself collapsed in accounting fraud.
Abandoned in July 2000 after the US Department of Justice sued and the European Commission prohibited it.
- Value
- $129B
- Announced
- October 1999
- Outcome
- Terminated
- Sector
- Telecom
- Deal type
- merger
- Acquirer
- MCI WorldCom (United States)
- Target
- Sprint (United States)
Why it mattered
WorldCom's Bernie Ebbers had assembled MCI through fifty-odd acquisitions in a decade and needed one more to challenge AT&T at the top of US long-distance and enterprise data. Sprint added the wireless leg WorldCom lacked. Combining second- and third-place would have taken combined US long-distance market share above 50%.
The story
Announced 5 October 1999, the deal became a stress test of the Clinton-era antitrust doctrine on strategic combinations in newly deregulated industries. The DOJ filed to block in June 2000; the EU Commission signaled a Phase II prohibition later the same month. The parties abandoned on 13 July 2000 rather than fight two competition authorities on two continents. Two years later WorldCom filed the largest bankruptcy in US history to that point after $3.8bn of accounting fraud came to light; Ebbers went to prison. Sprint would not do a comparable-scale deal until the T-Mobile merger closed in 2020.
What it left behind
The DOJ decision reset the ceiling for horizontal telecom consolidation in the United States for a full decade. The subsequent WorldCom collapse arguably vindicated the regulator's read that the combined entity had been priced on numbers that weren't there.
At a glance
- Structure
- All-stock, friendly
- Announced
- 5 Oct 1999
- DOJ suit filed
- 27 Jun 2000
- Abandoned
- 13 Jul 2000
- Blocking authorities
- US DOJ, EU Commission
- Combined market share
- ~54% US long-distance
- Break fee
- None
- WorldCom bankruptcy
- 21 Jul 2002