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CNN Live At Daybreak

AT&T And Comcast Announce Merger

Aired December 20, 2001 - 05:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: AT&T has agreed to a $52 million merger with Comcast. Those companies are expected to formally announce the deal at a news conference coming up in just a few hours.

Well, the Comcast-AT&T deal affects cable subscribers in 41 states. It would also mean moving around a lot of money and stock.

CNN's Allan Chernoff has more.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): The deal creates a mammoth in the cable, TV and broadband businesses: 22 million subscribers, a major presence in 17 of the nation's top 20 cities and $19 billion in revenues if the two companies were combined today, enough to convince Comcast to dramatically boost its original bid and outspend competitors AOL Time Warner and Fox Communications.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As we began to study the company, we got more excited with what we saw and how fantastic AT&T-Comcast can be.

(END VIDEO CLIP)

CHERNOFF: Comcast's Brian Roberts will be chief executive officer; AT&T's C. Michael Armstrong chairman. Based on Wednesday's closing prices, the deal is worth $13.07 a share to AT&T stockholders, more than three-quarters the prices of AT&T stock. AT&T holders will control two-thirds of the company; the Roberts family, which runs Comcast, the other one-third. And the deal will take a load of debt off AT&T's hands.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They will be much stronger financially in terms of their balance sheet, because we will send over to the AT&T- Comcast about $23 billion worth of debt.

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CHERNOFF: Microsoft will become a major shareholder, agreeing to convert $5 billion of AT&T debt into stock in the new company.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Given the history of cable being a fairly recession-resistant, stable, predictable growth business, and Comcast being one of the better operators of cable, we think they can certainly handle the debt load and have plenty of cash flow to offset it.

(END VIDEO CLIP)

CHERNOFF (on camera): Comcast is paying about $4,500 per subscriber to do the deal, but Brian Roberts is convinced it will pay off. He describes it as a once in a lifetime opportunity.

Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

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