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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: APRIL 5, 1999
(Date of earliest event reported)
GTE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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NEW YORK 1-2755 13-1678633
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION)
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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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GTE CORPORATION
FORM 8-K
Item 7. Financial Statements and Exhibits
(a) Financial Statements - None
(b) Pro Forma Financial Information - None
(c) Exhibits
99.1 Press Release issued by GTE Corporation on April 5, 1999
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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: April 5, 1999 /s/ Paul R. Shuell
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Paul R. Shuell
Vice President and Controller
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INDEX TO EXHIBITS
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EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release issued by GTE Corporation on
April 5, 1999
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Exhibit 99.1
Media Contact: Peter W. Thonis, GTE, 972-507-5367, [email protected]
Adam Weiner, for Georgetown Partners, 212-521-4823,
[email protected]
April 5, 1999
GTE TO ACQUIRE AMERITECH WIRELESS ASSETS IN MIDWEST
* Combination Will Speed Strategy to Become National Wireless Provider;
* Investment Firm Georgetown Partners to Have Equity Interest in Acquisition
IRVING, Texas, -- GTE Corporation today announced that it will acquire
approximately half of Ameritech's wireless properties, enhancing GTE's wireless
portfolio in the Midwest and further accelerating the company's strategy to
become a national provider of telecommunications services. The company will pay
$3.27 billion in cash for the properties, which include 1.7 million subscribers
and more than 12.9 million total POPs.
The investment company Georgetown Partners will participate in the
acquisition and will hold a minority equity interest in the properties.
The boards of directors of GTE, Ameritech and Georgetown Partners have
approved the transaction. Bell Atlantic has agreed to support the transaction
and has given its consent as is required under the terms of its merger of
equals agreement with GTE. The acquisition involves properties Ameritech must
divest as part of its proposed merger with SBC.
The Ameritech properties will strengthen GTE's national wireless
competitiveness, adding three important U.S. markets - Chicago, St. Louis and
Central Illinois - to GTE's existing wireless operations in 17 states. When GTE
and Bell Atlantic finalize their merger, the combined company will have a
wireless footprint encompassing nearly two thirds of the largest U.S. markets.
In total, the merged company, based on today's numbers, would have
approximately 13 million customers, making it in terms of subscribers the
largest wireless operator in the U.S.
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GTE Chairman and CEO Charles R. Lee said, "The addition of Ameritech's
wireless properties in the Midwest will accelerate our wireless strategy,
enabling us in combination with Bell Atlantic to build an efficient,
coast-to-coast wireless operation. At the same time, these properties will both
enhance our ability to bundle products and services in areas where we also
offer local phone service, and facilitate expansion into the local phone
markets in key Midwest cities such as Chicago and St. Louis. The result will be
a new competitor for wireless and wireline services in selected Midwest
markets, as well as a stronger contender in the national wireless marketplace
overall."
On a GTE stand-alone basis, the transaction is expected to be slightly
dilutive to earnings per share in the first year. Moreover, the initial pro
forma dilution to the earnings per share of the combined GTE-Bell Atlantic is
expected to be insignificant. GTE said it would initially finance its portion
of the purchase with debt, but would pay down that debt with the more than $3
billion the company expects to generate from the previously announced sale of
non-core assets.
Under the terms of the definitive agreement, completion of this
transaction is contingent on the close of the SBC-Ameritech merger, expected in
mid 1999.
The wireless properties will initially be managed as a stand-alone
subsidiary, which will be 93 percent owned by GTE and 7 percent owned by
Davenport Cellular Communications LLC, a company wholly owned by Georgetown
Partners. Chester Davenport, Chairman of Georgetown Partners and Davenport
Cellular, will serve as Chairman of the subsidiary, which will report to Mark
S. Feighner, President of GTE Wireless, in Atlanta. Beyond Davenport Cellular's
financial investment, it will provide the GTE subsidiary with marketing
services designed to capture demand for wireless products and services in
high-potential but under-served ethnic markets. Once the GTE-Bell Atlantic
merger is completed, the properties will be integrated into the combined
companies' wireless business.
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GTE-3
Mr. Davenport said, "The Ameritech wireless operations represent an
excellent investment opportunity for Georgetown Partners, consistent with our
strategy of bringing capital to businesses that are being divested as a result
of industry consolidation. We're very pleased to have as a partner a company
with the operating expertise and broad existing wireless footprint of GTE, and
we look forward to helping GTE market its cellular services."
Mr. Lee said, "We're pleased to be working with Georgetown Partners.
Chester Davenport has a proven record of creating value through innovative
technology and marketing strategies, and his firm's involvement will be an
important addition to our efforts."
Mr. Feighner said, "In an industry characterized by rapid
consolidation and aggressive pricing, our strategy has been to offer customers
rate plans with the best local and regional coverage. The addition of
Ameritech's properties in the Midwest helps us fill out our existing robust
footprint, giving us greater coverage and pricing flexibility. More important,
it is the melding of two talented groups of employees forming a wireless
operation that will be stronger together than they would have been separately."
GTE believes that the national scale and scope achieved through this
acquisition and in combination with its merger with Bell Atlantic will enable
the wireless operation to realize significant revenue enhancements, cost
savings and capital efficiencies. Acquiring these Ameritech properties will
increase GTE's wireless subscriber base by more than one third, enabling
greater economies of scale in an increasingly competitive industry.
The Ameritech wireless properties complement GTE's existing footprint.
They overlap with approximately 500,000 of GTE's wireline access lines in
Illinois, Indiana and Missouri, enabling GTE to expand its bundling
initiatives, and are contiguous with existing GTE wireless properties in
Illinois, Indiana, Kentucky and Tennessee. Moreover, Ameritech utilizes CDMA
digital technologies that are fully compatible with those of GTE and Bell
Atlantic.
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GTE-4
The transaction will require approval by various regulatory
authorities, as well as expiration of the applicable Hart-Scott-Rodino waiting
period.
With revenues of more than $25 billion in 1998, GTE is a leading
telecommunications provider with one of the broadest arrays of services in the
industry. In the U.S., GTE provides local service in 28 states and wireless
service in 17 states; nationwide long-distance service and internetworking
services ranging from dial-up Internet access for residential and small
business consumers to Web-based applications for Fortune 500 companies; as well
as video service in selected markets. Outside the U.S., the company serves more
than nine million customers.
Georgetown Partners was founded in 1989 and is based in Bethesda, Maryland.
Mr. Davenport, its Chairman, was the founder and Chairman of Envirotest Systems
Corp., an American Stock Exchange-listed company which was sold in October 1998
to a private firm for approximately $580 million. Georgetown Partners' original
investment was in the assets that eventually formed Envirotest Systems Corp.
