Merger mania, indeed: on this day in 1998, AT&T made a move to return to the local phone service game by snapping up cable heavyweight Tele-Communications, Inc. for a reported $48 billion. The deal, inked a mere ten days after the two companies opened negotiations, handed AT&T cable connections in roughly 33 million homes across the United States. This was a stunning reversal of fortune for the phone industry king, which, a decade back, had been forced to relinquish its choke hold over local phone lines and divest itself of its regional service providers (the "Baby BellsÝ). Along with reemerging as a local phone force, the acquisition of Tele-Communications also boosted AT&T's status in the booming Internet industry. Moreover, the company was primed to take a leading role in the long-awaited convergence of the various telecommunications channels. For cash-strapped Tele-Communications, the merger promised to help ease the debts company chief John Malone piled up in his quest to make his company the king of convergence.
Source: www.history.com
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