SBC Takes Equity Stake in Concentric
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Regional Bell telephone company SBC Communications Inc. Tuesday announced plans to buy a 4 percent stake in Internet provider Concentric Network Corp. as part of a broader plan to integrate the two companies' services.
SBC has the option to either acquire the shares directly from Concentric for $24.15 each or buy them on the open market. The telephone company also has an option to purchase an additional 4 percent stake within three years at $21 a share.
The two companies will work together to accelerate the roll-out of a number of packet-switched services to business customers, including virtual private networks, Web hosting and electronic commerce initiatives.
Mike Turner, SBC's executive vice president of corporate planning and capital management, said the relationship strengthens SBC's ability to meet the needs of business customers.
Henry R. Nothhaft, Concentric's chairman, president and chief executive officer, characterized the deal as the first of its kind between a data networking company and regional telephone operator.
"Together, we're bringing a wide range of innovative (Internet Protocol) products to SBC's substantial customer base through the strength of our brands. This relationship is a strong testament to our IP networking expertise and benefits the small and medium-size business marketplace that Concentric and SBC jointly target," he said.