EC gives final approval to MCI/WorldCom merger

NEWS As expected, the EC yesterday approved the $37bn (£22.6bn) merger of WorldCom and MCI. As a result of an EC investigation - which was encouraged by competitors such as GTE and Sprint - the companies have agreed to divest all MCI's Internet assets. The EC said it found "significant overlaps" across both telcos' Internet businesses, which would have given the combined company control of about half the Internet backbone. In order to get regulatory approval, MCI offered to sell its wholesale Internet business to Cable & Wireless for $625m (£381.5m), but that move was deemed insufficient by the EC. An MCI spokesman declined to comment on which firm will buy MCI's Internet assets. He said the companies are "pleased with the EC decision, and look forward to the US Department of Justice (DoJ) completing its review shortly".
Once the telcos gain regulatory approval from US authorities including the DoJ and the Federal Communications Commission, they are expected to announce a buyer for MCI's assets.