BELL ATLANTIC AND NYNEX AGREE TO MERGER OF EQUALS UNITES NATURAL MARKET MERGER WILL CREATE MARKET LEADER AND NATION'S SECOND LARGEST TELECOMMUNICATIONS COMPANY PHILADELPHIA and NEW YORK, April 22 /PRNewswire/Asianet/ — The boards of directors of Bell Atlantic (NYSE: BEL) and NYNEX (NYSE: NYN) have unanimously approved a definitive agreement for a merger of equals between the two corporations with a combined market value in excess of $50 billion. The merger will create the nation's second largest telecommunications company, with 133,000 employees, 1995 revenues of $27.8 billion (including unconsolidated wireless) and earnings of $3.1 billion (after adjustments for special items). The company will provide telecommunications, entertainment and information services to 26 million customers in 13 Northeastern and Middle Atlantic states and the District of Columbia — the most communications-intensive region of the country — as well as to customers throughout the nation and the world. The new company will also be one of the world's largest providers of wireless communications, serving 3.6 million customers. The name of the new company will be Bell Atlantic. The corporate headquarters will be in New York City. The new company will maintain significant operations in Boston, Philadelphia, and Arlington, Va. Under the terms of the agreement, NYNEX shareholders will receive one share in the new company for each NYNEX share owned and Bell Atlantic shareholders will receive 1.302 shares in the new company for each Bell Atlantic share owned. The transaction is expected to be accounted for as a pooling of interests and to be tax-free to both companies' shareholders. Closing is expected within 12 months. The board of directors of the new company will consist of an equal number of members from each company's board. Raymond W. Smith, chairman and chief executive officer of Bell Atlantic, will be the chairman and chief executive officer of the new company. Ivan G. Seidenberg, chairman and chief executive officer of NYNEX, will be vice chairman, president and chief operating officer. According to the terms of the agreement, Seidenberg will become chief executive officer of the new company approximately one year after the closing of the merger, and chairman upon Smith's retirement. The designated key management team for the new company will consist of top managers from Bell Atlantic and NYNEX. The new chief financial officer and executive vice president, Finance and Corporate Development, will be Frederic V. Salerno, currently vice chairman, Finance and Business Development, NYNEX. The heads of the major business units will be: Lawrence T. Babbio, Jr., currently vice chairman, Bell Atlantic, will be president and CEO, Wireless & Global Enterprises; James G. Cullen, currently vice chairman, Bell Atlantic, will be president and CEO, Telecom Group; Richard A. Jalkut, currently president and group executive, NYNEX, will be president and CEO, Network Services. "This new company will serve the world's best communications marketplace. By combining, we will be able to increase our revenues, reduce our costs, and improve our service. Under a single brand we will build on our common strengths and provide our customers with tremendous value," Smith said. "This is the most natural partnership in the world. We have worked well together for years," Smith continued. "We are already a team with a successful track record. Bell Atlantic NYNEX Mobile has shown that we can integrate two independent businesses efficiently, with consistent and innovative service to customers, fair treatment of employees and positive financial results for shareholders. In less than two years, Bell Atlantic NYNEX Mobile has achieved a market leadership position with innovative products, faster customer growth and sharply improved profitability. "Our two companies have a significant global presence, with major operations in Europe, Asia, Latin America and New Zealand," Smith added. "We will build on our new partnership to strengthen our international businesses. For example, Fiber-optic Link Around the Globe (FLAG) — global fiber facilities from the U.K. to Japan, which NYNEX is now building — will give us expanded opportunities to enter into high growth markets." Seidenberg said, "We must remain strong at home if we are to compete in the rapidly growing global communications marketplace. Innovative marketing, quality of service and continuing the development of a modern network will be our top priorities. In 1995, Bell Atlantic and NYNEX invested nearly $5 billion in wireline network facilities and an additional $700 million in our Bell Atlantic NYNEX Mobile wireless business. The new company will maintain a strong local presence through investment and employment in the states we serve and will continue our long-standing traditions of community involvement and corporate citizenship. "We are working to implement the vision of the Telecommunications Act of 1996. We remain committed to opening our own markets to competition so that we can quickly enter new markets such as long distance," Seidenberg added. "We will compete aggressively for the long distance traffic originating in the Northeast Corridor," said Seidenberg. "With over $20 billion of long distance traffic originating within our region, we see this as a significant business opportunity. About 45 percent of that traffic both originates and terminates within our new region and could be carried economically over the network of the new Bell Atlantic; this is a significantly higher volume than the two companies would carry separately. "We are particularly excited by the opportunities in the international long distance marketplace. Our customers currently account for approximately 35 percent of all U.S. international calls, with a high concentration of traffic moving to and from Canada, Europe and Japan," Seidenberg added. (more)