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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 7, 1999
(Date of earliest event reported)
GTE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 1-2755 13-1678633
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
1255 Corporate Drive, SVC04C08, Irving, Texas 75038
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code 972-507-5000
(Former name, former address and former fiscal year,
if changed since last report)
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Item 5. Other Events
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Attached exhibits are (i) a press release issued by Bell Atlantic Corporation
and GTE Corporation on May 7, 1999, and (ii) a press release issued by the U.S.
Department of Justice on May 7, 1999. The press releases announce the completion
of the U.S. Department of Justice's review of the proposed merger of Bell
Atlantic Corporation and GTE Corporation and the companies' agreement to a
consent decree to dispose of overlapping wireless properties.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits.
99.1 Press Release, dated May 7, 1999, issued by Bell Atlantic Corporation and
GTE Corporation.
99.2 Press Release, dated May 7, 1999, issued by the U.S. Department of
Justice.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GTE Corporation
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(Registrant)
Date: May 10, 1999 /s/ Paul R. Shuell
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Paul R. Shuell
Vice President and Controller
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EXHIBIT INDEX
Exhibit
Number
- -------
99.1 Press Release, dated May 7, 1999, issued by Bell Atlantic Corporation
and GTE Corporation.
99.2 Press Release, dated May 7, 1999, issued by the U.S. Department of
Justice.
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EXHIBIT 99.1
[LOGO OF GTE]
[LOGO OF BELL ATLANTIC]
NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Susan Kraus, Bell Atlantic, 212/395-0500;
[email protected]
----------------------------
Peter Thonis, GTE, 972/507-5367
[email protected]
-----------------------
May 7, 1999
Department of Justice Clears
Bell Atlantic-GTE Merger
Companies enter consent decree to resolve wireless overlaps
WASHINGTON -- Today the U.S. Department of Justice (DOJ) gave its approval to
the merger of Bell Atlantic and GTE. The two companies and DOJ agreed to a
consent decree to dispose of the companies' overlapping wireless properties. No
other conditions were imposed on the merger.
After an exhaustive review of the transaction, DOJ carefully considered and
rejected all of the other various competitive arguments raised by opponents of
the merger, including many of the arguments still being considered at the
Federal Communications Commission and various state commissions.
"The decision by DOJ today underscores that this merger will strengthen
competition and deliver to consumers a new, top-tier telecommunications provider
that will rival existing and emerging national and global carriers," said
William P. Barr, executive vice president and general counsel for GTE. "This
merger promises a new era in consumer choice for telecommunications products and
services, fulfilling the pro-competitive vision embodied in the
Telecommunications Act of 1996."
"We are extremely pleased with the outcome of the department's
investigation. Some of the department's best antitrust attorneys were dedicated
to our merger and gave it a clean bill of health. We commend the staff for its
hard work and thoroughness," said James R. Young, executive vice president and
general counsel of Bell Atlantic.
"When we announced the merger," Young explained, "we knew we would need to
address certain issues related to the companies' wireless overlaps. The decree
gives us full flexibility to clear wireless conflicts by disposing of either
cellular or PCS properties. It also allows us to retain 10 megahertz (MHz)
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of broadband spectrum in areas where we choose to sell our PCS properties.
Finally, we have the time to resolve wireless conflicts in an orderly way."
GTE and Bell Atlantic announced last July that the two companies have
agreed to a merger of equals. To date, 27 state public utility commissions have
cleared the merger. The merger also has won the support of the AFL-CIO,
Communications Workers of America, the International Brotherhood of Electrical
Workers, and dozens of business and community leaders from areas served by GTE
and Bell Atlantic.
Shareholder voting on the merger is under way by both companies and will be
completed at their annual meetings on May 18 (GTE) and May 19 (Bell Atlantic).
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EXHIBIT 99.2
[LOGO OF DEPARTMENT OF JUSTICE]
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
FRIDAY, MAY 7, 1999 (202) 514-2007
WWW.USDOJ.GOV TDD (202) 514-1888
JUSTICE DEPARTMENT REQUIRES BELL ATLANTIC AND GTE TO DIVEST
WIRELESS BUSINESSES IN ORDER TO PROCEED WITH MERGER
Divestitures in 65 Markets Located in 9 States
WASHINGTON, D.C. -- The Department of Justice today agreed with Bell
Atlantic and GTE on a consent decree that would resolve the Department's
antitrust concerns about Bell Atlantic's merger with GTE by requiring the two
firms to sell one of their two interests in overlapping wireless telephone
systems in 65 markets in 9 states. The divestitures would include the major
metropolitan areas of Chicago, Houston, Tampa, and Richmond. This is one of the
largest divestiture packages involving a merger ever required by the
Department's Antitrust Division.
The Department's lawsuit and proposed consent decree were filed today in
U.S. District Court in Washington, D.C. The consent decree, if approved by the
Court, would settle the suit. The Antitrust Division filed the lawsuit under
Section 7 of the Clayton Act, which prohibits mergers that may substantially
lessen competition, and reflects the Division's view about the antitrust issues
raised by the proposed merger. Other government agencies, including the Federal
Communications Commission (FCC) and several state public utility commissions,
are also reviewing the Bell Atlantic/GTE transaction under the laws that those
agencies enforce.
According to the Department, the merger as originally proposed would have
led to a loss of head-to-head competition in wireless mobile telephone services
in all 65 markets. In four of the markets, Bell Atlantic has an ownership
interest in one cellular system, and GTE has an ownership interest in the other.
In 46 of these markets, GTE has an ownership interest in one of
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-2-
the cellular systems and PrimeCo--a firm that is 50 percent owned by Bell
Atlantic--owns one of the personal communications services (PCS) wireless
businesses. In addition, GTE is acquiring 15 cellular systems from Ameritech in
a recently announced acquisition, and PrimeCo owns the PCS wireless business in
those 15 markets.
"Wireless mobile telephones are increasingly becoming an important part of
everyday life for an ever-growing number of Americans, and we rely on
competition to ensure that customers get the lowest prices as well as features
and rate plans that best fit their needs," said Joel I. Klein, Assistant
Attorney General in charge of the Department's Antitrust Division. "Without the
divestitures required by this consent decree, competition in 65 markets would
likely have been reduced, causing higher prices or lower quality wireless
telephone services for potentially millions of subscribers."
Under the proposed consent decree, Bell Atlantic and GTE are required to
divest their interest in one of the two overlapping wireless businesses that
they either already own or will own in 65 geographic areas. If Bell Atlantic and
GTE fail to complete the divestitures within 180 days of closing or earlier
under certain circumstances, they must transfer to a trustee chosen by the
Department, the remaining wireless systems that are to be divested. The trustee
will own and control the systems until they are sold to a final purchaser,
subject to safeguards to prevent the merged Bell Atlantic/GTE from influencing
their operation.
The 65 affected markets have a total population of more than 25 million.
These markets involve both Metropolitan Statistical Areas (MSA) and Rural
Service Areas (RSA) that either overlap with other MSAs or with Major Trading
Areas (MTAs). MSAs are the 306 urban areas in the U.S. defined by the federal
government that are used by the FCC to license cellular systems in urban areas.
RSAs are the 428 areas defined by the FCC that are used for licensing
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-3-
cellular systems in rural regions of the U.S. outside of MSAs. MTAs are the 51
areas that are used by the FCC for licensing certain PCS systems.
The MSAs affected by this settlement are in:
. Alabama (Mobile);
. Florida (Bradenton, Fort Myers, Jacksonville, Lakeland-Winter Haven,
Pensacola, Sarasota, Tampa-St. Petersburg);
. Indiana (Fort Wayne, Gary-Hammond-East Chicago);
. Illinois (Aurora-Elgin, Bloomington-Normal, Champaign-Urbana-Rantoul,
Chicago, Decatur, Joliet, Kankakee, Rockford, Springfield);
. New Mexico (Las Cruces);
. South Carolina (Anderson, Greenville);
. Texas (Austin, Beaumont-Port Arthur, Bryan-College Station, Dallas-Fort
Worth, El Paso, Galveston, Houston, San Antonio, Sherman-Denison,
Victoria); and
. Virginia (Newport News-Hampton, Norfolk-Virginia Beach-Portsmouth,
Petersburg-Colonial Heights, Richmond).
The RSAs affected by this settlement are in:
. Florida (Citrus, Collier, Glades, Hardee, Putnam, Monroe);
. Illinois (Adams, Bureau, Jo Daviess, Mason, Mercer, Montgomery,
Vermilion);
. Indiana (Huntington, Newton);
. Texas (Burleson, Chambers, Cherokee, Navarro, Newton, Wilson);
. Virginia (Amelia, Buckingham, Caroline, Greensville, Madison); and
. Wisconsin (Vernon).
Bell Atlantic, headquartered in New York City, had 1998 revenues in excess
of $31 billion. It is the incumbent provider of local telephone services in
Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts,
New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont,
Virginia, and West Virginia. Bell Atlantic also provides mobile wireless
telephone service, serving areas in the states where it provides local telephone
services, as well as in Arizona, Georgia, North Carolina, New Mexico, South
Carolina, and Texas. Through its 50 percent partnership in PrimeCo, Bell
Atlantic also provides wireless service in the states of Alabama, Arkansas,
Florida, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, New Mexico,
Ohio, Oklahoma, and Wisconsin. Bell Atlantic is the nation's fourth
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largest wireless mobile telephone service provider, with about 6.6 million
subscribers nationwide.
GTE, headquartered in Irving, Texas, had 1998 revenues in excess of $25
billion. GTE provides local telephone service to retail customers in Alabama,
Alaska, Arizona, Arkansas, California, Florida, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Nebraska, Nevada, New
Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina,
Texas, Virginia, Washington, and Wisconsin, and also provides wireless mobile
telephone service in most of these states. GTE is a major wireless mobile
telephone service provider, with about 4.8 million subscribers nationwide.
Ameritech, headquartered in Chicago, had more than $17 billion in revenues
in 1998 and is the incumbent provider of local telephone services in Illinois,
Indiana, Michigan, Ohio, and Wisconsin. Ameritech provides cellular mobile
telephone services in those states, as well as in Missouri and Hawaii, with a
total of about 3.2 million subscribers.
As required by the Tunney Act, the proposed consent decree will be
published in the Federal Register, together with the Department's competitive
impact statement, which will be filed with the court shortly. Any person may
comment on the proposed decree by submitting comments to the Department. After a
60-day comment period, the United States will reply to any public comments and
seek entry of the decree by the Court.
# # #
99-176
