ATLANTA – BellSouth Corp. (BLS) shareholders approved Friday the proposed sale of their company to AT&T Inc. (T) for $67 billion in stock, a deal that would expand the reach of the nation's largest telecommunications provider and put the two companies' wireless joint venture under one roof.
The vote during a special meeting in Atlanta was 97 percent in favor of the deal, which was announced March 5 and is expected to close by the end of the year.
AT&T shareholders were scheduled to vote later Friday in San Antonio on whether to issue new stock in the combined company.
Federal and state regulators also must approve the deal.
"Our cultures are a good fit," BellSouth Chief Executive Duane Ackerman told shareholders.
In papers filed with the government, AT&T and BellSouth have said that allowing the parent companies of Atlanta-based Cingular Wireless LLC to merge will help eliminate challenges they now face in managing the nation's largest cell phone provider.
In their FCC application, the companies said Cingular has been successful, but increasingly faces challenges from its management structure. San Antonio-based AT&T owns a 60 percent stake, and Atlanta-based BellSouth the rest.
The merger also would provide efficiencies for the combined company, AT&T and BellSouth have said.
A day after the deal was announced, AT&T said it plans to cut up to 10,000 jobs, mostly through normal turnover, if its purchase of BellSouth is approved. The work force reduction would take place over three years. Before the cuts, the combined company would have around 317,000 employees, including Cingular.
During Friday's BellSouth meeting, which lasted about 30 minutes, some shareholders questioned how the deal will affect employee benefits and the future of Cingular.
Ackerman said Cingular's headquarters will remain in Atlanta for at least five years. Beyond that, AT&T has not made any plans to move the headquarters, though there can be no guarantees, Ackerman said.
"It's impossible to commit a future board to exactly what they will do forever," Ackerman said,
Once the deal is completed, the BellSouth and Cingular names will be phased out.
Ackerman also was asked why the proxy statement on the deal did not mention the potential liability AT&T may face with a pending multibillion dollar lawsuit over allegations some major phone companies gave customer data to the National Security Agency.
Ackerman said it was an issue of timing, and that the information was contained in regulatory filings made by AT&T. He declined to comment on the lawsuit, citing national security concerns.
The merged company would have 70 million local-line phone customers, 54.1 million wireless subscribers and nearly 10 million broadband subscribers in the 22 states where they now operate.
AT&T was formed by SBC's acquisition of AT&T Corp. in November. The deal added a substantial national reach to the former Southwestern Bell's local business, which is concentrated in 13 states, including Texas, California, and the Midwest. BellSouth is the dominant local telephone provider in nine Southeastern states.
AT&T will pay 1.325 of its own shares for each BellSouth share.