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An overview of the AT&T and Cingular merger and its potential future outcomes for both companies

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  1. Introduction.
  2. AT&T and Cingular?An Overview of the Merger.
  3. Challenges of the Merger.
  4. Problems at Cingular.
  5. Was the Merger the Right Choice?
  6. Conclusion.

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. [...]

[...] emerging cable technologies and their impact on the phone and wireless industry?the decision made by these organizations to acquire AT&T was predicated upon the realization that something needed to be done in order to ensure the long-term viability of the organization. With shrinking landline markets, Cingular had to consider what options were available for improving the organization over the long-term. Even though SBC and BellSouth are well aware of the fact that they were taking a risk, their relentless pursuit of AT&T regardless of the cost, appears to have left the organization in a precarious financial position. [...]

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