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.
“SBC’s data business has grown approximately 33 percent a year and we are
confident this relationship will significantly increase our ability to be
the leading provider of data communications,” he said.
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.