AT&T buys BellSouth, effect on comms unclear

SAN ANTONIO: AT&T's gargantuan acquisition of BellSouth last week was a major first-quarter boost for the financial communications firms involved in the deal. But the companies said that the impact of the $67 billion purchase on internal communications departments and agency relationships will not be determined for months to come.

SAN ANTONIO: AT&T's gargantuan acquisition of BellSouth last week was a major first-quarter boost for the financial communications firms involved in the deal. But the companies said that the impact of the $67 billion purchase on internal communications departments and agency relationships will not be determined for months to come.

The combined company, including AT&T, BellSouth, and Cingular - which was jointly owned by the two companies - will be rebranded as AT&T.

Fleishman-Hillard and the Brunswick Group combined to advise AT&T on the deal. Fleishman partner and SVP Michael Coe confirmed that the two agencies worked together on AT&T's behalf, but declined to elaborate on what each agency did.

Brunswick handled communications for SBC last February when it purchased AT&T. Fleishman, which was SBC's AOR, was also tapped to handle SBC's rebranding into AT&T.

Coe noted that the SBC rebranding, which is already under way, will be conducted as a separate campaign from the BellSouth rebranding.

"The SBC rebranding has already started. That started two months ago," he said, adding that a BellSouth campaign would commence once the merger closes, which is estimated to be in 12 months.

AT&T said last week it expects to cut 10,000 jobs over the next three years as a result of the purchase. The specific breakdown, however, has yet to be determined.

Tim Klein, Cingular Wireless VP of PR, said it's too early to determine the impact, if any, on Cingular's in-house communications team and agency relationships.

Jeff Battcher, VP of corporate communications for BellSouth, said his company handled financial communications for the transaction in-house, except for some strategic advice from Burson-Marsteller's New York office, which has worked with the company for more than 20 years.

Burson MD of corporate communications Michael Claes said he's assisted BellSouth since its initial spinoff from AT&T in the '80s, making this deal a "full circle."

Claes said he did not know what the future of the agency's relationship will be after the deal is complete, but added, "I assume that the AT&T and SBC side is very happy with Fleishman."

Battcher said the preparations for communicating the deal began a week in advance. But a leak to The New York Times left the companies scrambling to move up the announcement at the last minute.

"The plan was to actually [release the news] early Monday morning," he said. "When the story leaked, we had to change and put the release out on Sunday. And so we had to move all of our communications up by nine hours."

Battcher, who was woken up at midnight on Saturday with news of the leak, immediately began working to move up the clock.

The internal communications by BellSouth included e-mail and voicemail messages from chairman and CEO Duane Ackerman to all employees and a PowerPoint presentation about the deal that was e-mailed to managers to help them explain the acquisition.

In addition to Burson, which handles crisis and strategic communications, BellSouth works with Porter Novelli in Atlanta on consumer issues. Battcher said he did not yet know how the agency relationships or staffing levels of his 25-person in-house communications team would be affected by the deal. But he said: "Will a few more of those [10,000 total job cuts] come from BellSouth [than the other companies]? Probably so, in the headquarters division."

The post-merger AT&T will have headquarters in San Antonio.

The deal must now be approved by a wide array of stakeholders, including the Department of Justice, the Securities and Exchange Commission, state agencies, and shareholders.

Battcher said that AT&T will be in charge of the rebranding plans when they are finally established. Walt Sharp, an AT&T spokesman, said no plans are in place yet.

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