Verizon Completes Acquisition Of MCI

Verizon Communications closed on its $8.6 billion acquisition of MCI Friday and began the integration process of the firm that was best known for its long distance offerings. Verizon prevailed over Qwest in the battle to acquire MCI.

A new unit, combining businesses from both firms, also debuted Friday entitled "Verizon Business."

The closing followed an announcement earlier in the week by MCI that it restated its financial statements for the first three quarters of 2005, reducing net income by $52 million. MCI said the restatement would have no impact on the acquisition.

In addition to its strength in long distance, MCI had built up a following among business customers. Verizon said the new business unit encompasses business and government customers and related functions from MCI as well as segments from Verizon.

"Our strategy is to be a customer-focused leader in consumer broadband and video, as well as business and government services, in both the landline and wireless environments," said Verizon chairman and CEO Ivan Seidenberg in a statement. "This milestone for Verizon creates a new competitive force with the power of the global MCI network and the reach of Verizon's broadband and wireless networks in the U.S."The reconstituted company will have about $90 billion in annual revenue and about 250,000 employees. Verizon now has three network-based operations: Verizon Business, Verizon Wireless, and its landline business.

The president of Verizon Business is John Killian, who has been overseeing integration policies involving the two firms since October. Michael Capellas, MCI's former president and CEO, is leaving the company.

Verizon said it will release additional details about Verizon Business at an upcoming formal launch.