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 (Date of earliest event reported):
December 9, 1999
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
Room 15G03, 1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(404) 249-2000
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Item 5. Other Events
Acquisition of E-Plus
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On December 9, 1999, BellSouth announced that it and KPN Royal Dutch Telecom
would Acquire 100% of German wireless carrier E-Plus. See Exhibit 99a for a
complete copy of the related press release.
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Cautionary Language Concerning Forward-Looking Statements
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Statements that do not address historical performance are based on our
assumptions and estimates and are subject to risks and uncertainties. For these
statements, we claim the protection of the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform Act of 1995.
Factors that could affect future operating results and financial position and
could cause actual results to differ materially from those expressed in the
forward-looking statements are:
o a change in economic conditions in domestic or international markets where
we operate or have material investments which would affect demand for our
services;
o the intensity of competitive activity and its resulting impact on pricing
strategies and new product offerings;
o further delay in our entry into the interLATA long distance market;
o higher than anticipated start-up costs or significant up-front investments
associated with new business initiatives;
o unanticipated higher capital spending from the deployment of new
technologies;
o unsatisfactory results in regulatory actions including access reform,
universal service, terms of interconnection and unbundled network elements
and resale rates; and
o failure to satisfactorily identify and complete Year 2000 software and
hardware revisions by us and third parties.
This list of cautionary statements is not exhaustive. These and other
developments could cause our actual results to differ materially from those
forecast or implied in the forward-looking statements. You are cautioned not to
place undue reliance on these forward-looking statements, which are current only
as of the date of this filing. We have no obligation to publicly release the
results of any revisions to these forward-looking statements to reflect events
or circumstances after the date of this filing.
<PAGE>
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.
BELLSOUTH CORPORATION
By: /s/ W. Patrick Shannon
W. Patrick Shannon
Vice President and Controller
December 10, 1999
BellSouth and KPN Royal Dutch Telecom to Acquire 100% of E-Plus
Companies Announce Strategic Alliance
ATLANTA, GA -- December 9, 1999 -- BellSouth Corporation (NYSE:BLS) announced
today it has exercised its right-of-first-refusal (as a current 22.507 percent
owner of E-Plus) to purchase Vodafone's 17.243 percent share of the German
wireless carrier E-Plus and that it will exercise its right-of-first-refusal to
purchase VEBA/RWE's 60.25 percent share of E-Plus. BellSouth also announced it
is forming an alliance with KPN Royal Dutch Telecom. KPN (NYSE: KPN) is
providing BellSouth a $9.4 billion loan to purchase the Vodafone and VEBA
shares. KPN will subsequently convert the loan into a 77.493 percent share of
BellSouth GmbH, the holding company that will own and operate E-Plus. Following
the closing, BellSouth and KPN will share control of E-Plus.
BellSouth has the option to convert its 22.507 percent of E-Plus into a 19
percent ownership interest in KPN or a stake in KPN Mobile of equivalent value.
KPN Mobile is a holding company for all of KPN's wireless investments, that is
expected to go public in the first half of 2000.
Initial discussions centered around a valuation of $6.5 billion for the
BellSouth stake in E-Plus. However, as the market has continued to positively
recognize the value of KPN to its shareowners, BellSouth's stake has risen to
$7.8 billion. "Our initial $150 million investment in E-Plus, currently valued
at $2.4 billion, has now been turned into a $7.8 billion asset," stated F. Duane
Ackerman, Chairman and CEO of BellSouth. "This is great news for BellSouth
shareholders because we have captured an incremental $5.4 billion in value that
is not currently reflected in our stock price." Mr. Wim Dik, Chairman and CEO of
KPN said, "We already made clear that we would be able to reach such a major
position in mobile through teaming with the right partner. We are convinced that
we have found in BellSouth an experienced partner in modern telecom services
with a progressive attitude to new developments. With them, we will be able to
speed up our growth in the European mobile markets."
BellSouth also has agreed to make up to $3 billion of loans to KPN to be used
for further wireless investments in Europe. In connection with the loans,
BellSouth will receive warrants to purchase approximately 52 million additional
shares of KPN. BellSouth will consider providing further loans of up to $5
billion to provide KPN financing for acquisitions of wireless carriers in
Europe. These additional loans, if made, would be convertible into shares of KPN
Mobile. BellSouth said it selected KPN as a partner because the company offered
shared control of E-Plus and the option to take an equity position in either KPN
or KPN Mobile.
"KPN is an aggressive competitor with multiple wireless properties in Europe,"
Ackerman said. "We expect to have a very successful partnership that creates
additional options for BellSouth in Europe."
The communications market in Europe exceeds $200 billion. Germany is an
especially important piece of that market, with a population of 82 million
people, and a relatively low wireless penetration rate of 23 percent vs. the
European average of 33 percent. BellSouth remains a major player in the global
wireless marketplace with operations in 20 countries, serving more than 10
million wireless customers worldwide.
About E-Plus
E-Plus is the third largest mobile operator in Germany. With an estimated 3.5
million customers at the end of 1999, E-Plus has a market share of 20 percent.
The company operates a GSM 1800 nation-wide network of approximately 7,000 base
stations. It is headquartered in Dusseldorf and has 3,000 employees.
About KPN
KPN Royal Dutch Telecom is the leading telecommunications company in The
Netherlands. It supplies the whole range of telecommunications and Information
and Communication Technology services in its home country and, either
independently or in co-operation with partners, in other countries, mainly in
West and Central Europe. It focuses on growth in four core activities: mobile,
fixed services, IP/data services and Internet, call center and media services.
In The Netherlands KPN has 9 million connections on the fixed network and is
market leader in mobile telephony (3.6 million customers) and Internet services.
Via KPNQwest (Nasdaq: KQIT), IP/data services are offered to the business and
wholesale market in Europe. KPN has a market capitalization of approximately
NLG. 70 billion and reported total operating revenues of NLG 17,719 million and
net income of NLG 1,515 million for the year ended 1998. KPN's net income for
the first half of 1999 was NLG 918 million on total operating revenues of NLG
8,849 million. KPN stated that its annual profit forecast for 1999 would be over
NLG 1.7 billion. With the addition of the German operator E-Plus, the newly
formed entity KPN Mobile becomes a major pan European mobile operator with
approximately 8 million customers.
KPN Mobile's footprint currently comprises operations in: The Netherlands,
Belgium (KPNOrange) Hungary (Pannon), Ukraine (UMC), Bulgaria (Mobikom,
acquisition pending) and Indonesia (Telkomsel).
About BellSouth
BellSouth (NYSE: BLS) is a $25 billion communications company. It provides
telecommunications, wireless communications, cable and digital TV, advertising
and publishing, and Internet and data services to more than 36 million customers
in 20 countries world-wide including Belgium, Denmark, Germany, The Netherlands
and the United Kingdom. In Latin America, BellSouth provides communications
services in nine countries: Argentina, Brazil, Chile, Ecuador, Panama,
Nicaragua, Uruguay and Venezuela. It plans to begin providing services to
Guatemala in mid-2000. BellSouth also provides communications services in China,
India, Israel and Singapore.
