SBC to Buy Sterling Commerce for $3.9B

FRAMINGHAM (02/22/2000) - Telecommunications giant SBC Communications Inc. said this morning it plans to acquire e-commerce vendor Sterling Commerce Inc. for about $3.9 billion in cash.

In a statement released this morning, SBC said the move is the latest in a string of deals aimed at offering its customers "end-to-end data and Internet-driven" products and services.

Sterling, based in Columbus, Ohio, focuses on helping customers build business-to-business e-commerce trading communities. It had $561 million in revenue last year and claims 487 of the Fortune 500 as customers. SBC was attracted to Sterling because of its expertise in the business-to-business e-commerce market.

Brad Sharp, Sterling's president and chief operating officer, said in the statement that his company is eager to have access to SBC's customer base and SBC initiatives such as Project Pronto, a $6 billion broadband network investment.

The deal offers Sterling shareholders $44.25 per share and is subject to stockholder approval and government antitrust review. Officials at both companies expect the deal to close sometime in the middle of this year.

SBC is the parent company of telecommunications firms Southwestern Bell, Ameritech Corp., Pacific Bell and Cellular One.

Sterling Commerce stock was up $11.94 per share in midmorning trade today to $43.50. SBC stock dipped $2.19 per share to $36.06.