LONDON-On and off and on and off again discussions between Cable & Wireless plc and British Telecommunications plc are reminiscent of a high school romance. This week they’re broken up.
“While the concept of merged global business had commercial and industrial merit, there was no prospect of solving the numerous problems the merger presented for the company in a reasonable timescale,” said Cable & Wireless in a prepared statement. The perceived value in merging did not justify the cost of continued delay in working out regulatory and partnership issues, added Cable & Wireless. For BT, the risks of merging outweighed the potential opportunity, said the company.
Cable & Wireless’ majority stake in Hong Kong Telecom was a key reason cited by analysts for BT’s interest in merging. Between the London companies, there were competitive investments that needed resolving to comply with anti-trust laws. Chief among them is Cable & Wireless’ majority owned company, Mercury Communications, BT’s competitor in the United Kingdom.
The companies reasons also are far-reaching. Aside from regulatory considerations, “there were also major problems for some of our partners,” said Rod Olsen, acting chief executive.
