(AP) A bid to create one of the world's largest phone companies vaulted another hurdle Thursday as AT&T Corp. investors approved SBC Communication Inc.'s $16 billion acquisition at what will likely be the legendary company's final annual shareholder meeting.
Nearly all the shares cast as votes approved the deal, though investors holding nearly 30 percent of AT&T's stock did not vote at all.
The merger still requires regulatory approvals at the federal and state level, though the companies expect to complete the transaction by late 2005 or early 2006.
SBC shareholders are not required to vote on the acquisition since the number of SBC shares being issued as payment for AT&T's stock amounts to less than a 20 percent increase in SBC's outstanding shares.
The vote to end AT&T's 130-year run as an independent company proved bittersweet for some shareholders and employees at the meeting. Many said they recognized the deal was necessary, yet criticized AT&T management actions as damaging.
AT&T, based in Bedminster, N.J., has seen its core long-distance business shrink dramatically amid growing competition from Bell rivals like SBC, cell phones and newer technologies such as Internet-based calling.
"We can't go it alone because of bad management, because of regulatory constraints, because of divestiture," AT&T manager Lani Flesch of Chicago said after the meeting as her eyes welled with tears. "We could have had it all and instead we're being bought."
San Antonio-based SBC, the local Bell for most of the Midwest and Southwest, expects to eliminate 13,000 jobs after the merger.
The marriage of the rivals, announced in January, would add corporate services and a national fiber-optic network to the list of businesses where SBC holds a dominant industry role. It is already the largest or second-largest U.S. provider of local, long distance, wireless and Internet services.
AT&T investors are slated to receive 0.77942 of a share of SBC common stock and a cash dividend of $1.30 for each share of AT&T they hold.
SBC's stock closed Thursday at $23.75 a share, down 19 cents, so the deal now values AT&T's stock at about $19.80 per share. That's about 4 percent higher than AT&T's current share price, which fell 22 cents Thursday to close at $19.04 on the New York Stock Exchange.
AT&T Chief Executive David Dorman told shareholders the merger is a strategic combination that will create a diversified company that can compete globally.
"It is our view that the AT&T-SBC merger creates greater opportunity for shareholder value in the long term," he said.
Some rivals and consumer advocates have opposed the merger as well as the proposed purchase of MCI Inc. by Verizon Communications Inc., arguing that the elimination of two major competitors from the market will lead to higher prices, less innovation and fewer product alternatives.
AT&T Chief Financial Officer Thomas Horton said after the meeting that as the industry restructures, consumers will see more choices from companies offering a variety of services.
The merger has won regulatory approval in 26 states and still needs the OK from 10 additional states and the federal government.
On the net:
(c) 2005 The Associated Press.
NOTE: For more telecom/internet/networking/computer news from the daily media, check out our feature 'Telecom Digest Extra' each day at. Hundreds of new articles daily.