Business & Finance
MCI agreed to an $8.54 billion takeover offer from Verizon, ending a three-month bidding war for the long- distance telecommunications service provider formerly known as WorldCom. Qwest Communications, which had raised the stakes for MCI several times - ultimately to $9.85 billion - dropped out of the running late Monday. MCI and Verizon said their deal will provide the former's corporate customers with more financial security than Qwest could have. But in a statement of its own, Qwest claimed the negotiations had been "permanently skewed" against it and that MCI was "more interested in bending to Verizon's will than serving its shareholders." Some analysts speculated that Qwest may yet raise antitrust objections in an attempt to block the merger.
Aerospace giants Boeing and Lockheed Martin agreed to end a bitter rivalry by creating a joint venture to build rockets for the US military. The partnership, which needs the approval of regulatory agencies, sets the stage for the nation's two largest defense contractors to drop pending litigation over proprietary information in rocketry. The 50-50 venture will be named United Launch Alliance and will be based in Denver. The partnership is expected to result in up to $150 million in annual savings for the Air Force, NASA, and other federal agencies.
Forstmann Little & Co, a New York private investment firm, agreed to buy 24 Hour Fitness Worldwide, the industry's largest company, for an estimated $1.6 billion. Based in San Ramon, Calif., 24 Hour Fitness operates 345 clubs in 16 states and four Asian countries.
Marconi Corp. confirmed that it will cut as many as 2,000 jobs after failing to win any of the $19 billion in infrastructure improvement contracts awarded last week by BT Group, Britain's No. 1 telecommunications operator. Marconi had invested significant resources and time in bidding for the BT contracts, and a spokesman described the failure as "devastating." The company, based in Coventry, England, builds and manages networking equipment and transmission systems. It came close to collapsing four years ago when the telecommunications industry went into steep decline. Analysts suggested that the company also may be about to put itself up for sale.