NEW YORK-Deutsche Telekom officially ended its negotiations to buy Qwest Communications International Inc. and U S West Inc. March 9, but the German carrier is continuing its search for acquisitions outside its borders.
In a statement released in the late evening, Qwest said, “a major telecommunications company has withdrawn from discussions to acquire Qwest and US West.”
Qwest, a long-distance phone carrier focused on Internet traffic, did not identify Deutsche Telekom as a suitor. However, the Denver-based carrier’s negotiations with Europe’s largest telecommunications provider came to light after U S West demanded that Qwest reveal any such discussions with a third party.
The $60 billion merger between Qwest and U S West, the western states Baby Bell, is scheduled to close in late summer. The Federal Communications Commission, the Justice Department and shareholders of both companies have approved the combination. However, several states in U S West’s 14-state region continue to review the deal. U S West had threatened to sue Qwest if it makes any outside deals with a negative impact on their merger.
“We regret that U S West apparently would not even consider an alternative transaction involving a major telecommunications company and Qwest, despite the possibility of greater value for U S West shareholders,” said Joseph P. Nacchio, chairman of Qwest.
However, earlier that day, U S West had issued a release, which said it would, under certain conditions, “consider taking steps to facilitate any additional transaction.” Those conditions require that the new offer not jeopardize its merger with Qwest and that it be as good or better than Qwest’s current bid for U S West, worth $98.92 per share as of March 9.
Hans Ehnert, a Deutsche Telekom spokesman, refused to comment on Qwest’s March 9 announcement that negotiations were over.
Instead, he said that DT’s strategy is concentrated on four areas-the consumer market, the Internet, wireless communications and global business services.
“We are focused on these growth areas, and expansion could be in the United States or elsewhere,” Ehnert said.
“We are not under pressure. We remain on the path to becoming a global player.”
The planned initial public offerings of T-Mobil, Deutsche Telekom’s cellular phone business, and T-Online, its Internet service provider unit, would provide the carrier with “more money in hand to continue our strategy.”
Ehnert also said Deutsche Telekom is evaluating whether to sell its 10-percent stake in Sprint Corp.
