Mergers between organizations often take place when it is financially or strategically advantageous for one or both organizations. While the ideal merger occurs when both organizations see the value of combining, even when the situation is ideal the end result can have a detrimental impact on the development of the merged organization. As such, mergers must take place in an environment that attempts to understand the problems that can arise when mergers occur. Further organizations must have a clear realization that the transition from single company to merged company carries with it a host of implications for future development.With the realization that mergers can carry with them a host of positive and negative benefits, there is a clear impetus to examine the contexts under which mergers take place. To this end, this investigation considers the recent merger that took place between AT&T and Cingular. Specifically, this investigation considers what problem prompted both organizations to consider a merger, whether or not a merger of the two organizations was the best decision for both and what outcomes can be expected as a result of the merger.
[...] [ ] We can expect to see fewer deals and higher prices, just as we've seen with the mergers of cable companies (Cingular wins Clearly, what this demonstrates is that the merger between AT&T and Cingular has no real guarantees for either the organizations involved in the merger or consumers seeking to find a better deal on wireless service. Finally, analysts examining the deal which took place between Cingular and AT&T have noted that the conditions under which the merger took place may have a negative impact on the new Cingular organization in the long-term. [...]
[...] Considering the problems occurring between SBC and BellSouth, Grow notes that once the merger between AT&T and Cingular had been finalized, both SBC and BellSouth were considering a consolidation of their operations in an effort to improve financial and organizational efficiency. As noted by Grow, “many in the industry figured marrying the two regional Bells made sense. Their customers and phone lines rarely overlap, and a merger would unify ownership of their joint-venture” (p. 38). Unfortunately, the CEOs of both organizations have not been able to agree on favorable terms for the combined organization. [...]
[...] The new Cingular would provide service in 97 of the country's top 100 markets and have revenue of more than $32 billion” (Cingular wins Despite the fact that the merger between AT&T and Cingular appeared to be the most salient means for both organizations to become leaders in the wireless field, researchers examining the merger have noted that in the months before the merger took place there were a host of problems encountered by Cingular in its bid to acquire AT&T. [...]
[...] Further complicating the merger between AT&T and Cingular is the fact that while both organizations have agreed on the financial terms of the organization, the issue of management is one that remains a considerable concern for the future of the organization. Rosenbush goes on to note that Cingular CEO Stan Sigman is expected to lead the combined organization. However, the role that senior executives in the AT&T organization will play in the development of the new Cingular is unclear at this time. [...]
[...] While SBC clearly has the upper hand in this process, the reality is that the internal competition between these organizations will ultimately have a negative impact on the resulting organization. Further the competition between SBC and BellSouth may place unexpected financial strain on both organizations and Cingular. Given Cingular's current financial situation, the end result of this process could be quite detrimental overall. Conclusion Unfortunately, the merger between AT&T and Cingular appears to have promulgated more harm than good for the parent companies of Cingular, SBC and BellSouth. [...]
Online readingwith our online reader
Content validatedby our reading committee