AT&T Canada, MetroNet Value Merger at $7 Billion

MetroNet Communications Corp. and AT&T Canada Corp. and. have agreed to merge the companies in a transaction they value at approximately $7 billion.

The network of the combined company will boast national fiber optic capabilities backed by SONET rings and more border crossings than any other telecommunications provider in Canada, proponents say. The merged network will include more than 3,800 intracity fiber route-kilometers and nearly 16,000 long distance fiber route kilometers (including intercity and cross-border fiber routes currently being constructed by MetroNet).

The merged enterprise, to be called AT&T Canada Corp. will comprise a one-stop shop for Canadian business customers for local and long distance voice, data, Internet, and electronic commerce services, as well as wireless services through Cantel AT&T, proponents say.

Following the merger, AT&T Canada will have combined annualized revenues of approximately $1.4 billion, more than 4,000 employees, and over $3.5 billion in assets.

The terms of the agreement outline a multi-stage transaction, which will result in MetroNet shareholders indirectly owning 69% of the merged company and AT&T Corp. indirectly owning 31%. The merged company, which will include ACC TelEnterprises, will market its services under the AT&T Canada brand.

According to Dan Somers, chairman of AT&T Canada Corp. and senior executive VP and CFO of AT&T, "MetroNet customers gain access to AT&T Canada's established long-distance voice and data network and the vast AT&T global network [while] AT&T Canada customers gain access to the country's most modern local service networks."

"Our customers will immediately have access to not only an advanced, end-to-end national network for 'any distance' and 'any bandwidth' service, but to a global network and services," says Craig Young, president and CEO of MetroNet Communications.