In the recent merger between Cingular and AT&T wireless, Cingular was forced to sell AT&T assets in several states.

QUESTION:

In the recent merger between Cingular and AT&T Wireless, Cingular was forced to sell AT&T assets in several states. Briefly research this merger, including the regulated requirements of the merger. Why do you think Cingular was required to perform these actions as part of the merger? Briefly explain the need to regulate mergers, both domestic and international. In your discussion, be sure to define the term merger and list some motives for mergers.


ANSWER:

Mergers are the amalgamation of two companies in order to create an economic advantage and to fight competition by sharing of resources between the companies and working combinedly to improve their operating efficiencies.

In the recent merger between Cingular and AT&T Wireless, Cingular was forced to sell AT&T assets in several states.

the merger between the companies are made on an agreement for the shareholders of the AT & T will receive some part of their share value. this merger would be creating an advantage to both the companies which individual companies could not achieve and they can turn out to be the best wireless communication provider.

Cingular acquired all the shares of AT & T and the main merger regulator is to provide the best and fast services in GSM And GPRS etc and to cut down the competition by its joint merger. it is merged to provide a bigger network, bigger coverage,

REGULATION OF MERGERS:

Mergers have to be regulated at the domestic level and international level because:

1) Few mergers may be done with an intention to predate the competitors which are not good for other companies as well as to the economy. since the mergers that affect or lead to monopoly are dangerous and unhealthy for competitors.

2) If mergers are not regulated then it may lead to hostile acquisitions by large firms over the small firms.

3) The local domestic business may be badly affected due to mergers that are created to beat domestic businesses and support some other foreign firms.

4) Regulation of mergers at domestic and international level is necessary to prevent any adverse impact on the company’s economy.

 

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