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: February 22, 2000
SBC COMMUNICATIONS INC.
A Delaware Corporation
Commission File No. 1-8610
IRS Employer No. 43-1301883
175 E. Houston, San Antonio, Texas 78205
Telephone Number (210) 821-4105
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Item 5. Other Events
Attached as an exhibit is a press release issued by SBC Communications Inc. on
February 22, 2000 related to the acquisition of Sterling Commerce, Inc.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit-99 Text of Press Release, dated February 22, 2000, issued by SBC.
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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.
SBC Communications Inc.
/s/ Robert Pickering
------------------------
Robert Pickering
Senior Vice President-
Finance (Corporate)
February 22, 2000
<PAGE>
EXHIBIT INDEX
Exhibit
Number
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99 Text of Press Release, dated February 22, 2000, issued by SBC.
Exhibit-99
SBC TO ACQUIRE E-BUSINESS SOLUTIONS LEADER
Move will accelerate companies' expansion into high-growth Internet markets
San Antonio, Texas and Columbus, Ohio, February 22, 2000
In a move to establish itself as a leader in the fast-growing
business-to-business e-commerce market, SBC Communications Inc. (NYSE: SBC)
today announced it entered into a definitive agreement to acquire Sterling
Commerce, Inc. (NYSE: SE), one of the world's leading providers of e-business
integration solutions.
The all-cash transaction, which is structured as a $44.25 per-share cash tender
offer followed by a merger with a subsidiary of SBC, is valued at nearly $3.9
billion. The tender offer is expected to commence in the next several days; the
transaction is expected to be completed by late March or during the second
quarter.
SBC's acquisition of Sterling Commerce builds on a series of strategic
initiatives, alliances and investments SBC recently has made to provide its
customers with end-to-end data and Internet-driven solutions and services. It
also gives SBC the skills and expertise to offer its business customers even
more advanced solutions in the future.
Sterling Commerce specializes in creating, powering and managing secure
"e-Marketplace communities" where multiple buyers and sellers can conduct
real-time transactions, exchange goods and services, collaborate on business
opportunities and share information faster and at lower costs.
Sterling Commerce's software and services allow customers to build
e-communities, to integrate business processes and to exchange information
within and between enterprises worldwide.
Sterling Commerce reported Fiscal 1999 revenues of $561 million, and provides
e-Marketplace solutions to over 45,000 customers worldwide, including blue chip
companies such as Wal-Mart, Johnson & Johnson, Sony and BMW. In the United
States, it serves 487 of the FORTUNE 500 companies.
According to International Data Corporation (IDC) the business-to-business (B2B)
e-commerce industry is expected to grow from $200 billion in 2000 to $2.5
trillion in 2004.
This rapid growth is being driven by buyers and sellers who are hungry for
sophisticated, secure e-Marketplace communities in which to conduct business
transactions faster and more efficiently over the Internet. It is also being
driven by companies eager to improve customer service, increase productivity and
enhance their competitive edge in the global market.
"This is an outstanding addition to our already strong line-up of data services,
enhancing our ability to offer our business customers integrated, end-to-end
e-business solutions worldwide," said Edward E. Whitacre Jr., chairman and chief
executive officer of SBC. "This instantly gives SBC the skill sets, software,
products and services needed to take the lead in one of the most rapidly growing
segments of the e-commerce market. Sterling Commerce's highly skilled
information technology teams also will help us in the future as we continue to
capitalize on Internet-driven opportunities."
Rich Dietz, president of SBC's Global Markets group, which serves nearly 425 of
the company's multi-national business customers, said the combination of SBC and
Sterling Commerce dramatically changes the competitive landscape of a market,
that while growing rapidly, requires substantial resources and expertise to
enter and remain competitive. "Business customers not only want a leader in
e-business integration solutions, they also want a company that they know and
trust, has the resources and scale to meet their unique needs, and offers
high-quality, reliable network services to connect e-Marketplace communities,"
said Dietz.
"No other player in the industry today can address all these needs in the way
that SBC and Sterling Commerce can. Together, we can capitalize on our unique
strengths to realize the tremendous synergies of our two customer bases," said
Dietz. Sterling Commerce will operate as a separate subsidiary within SBC's
Global Markets group, reporting to Dietz, and remain based in Columbus, Ohio.
While it will have substantial autonomy to pursue growth opportunities, it will
work closely with SBC's business account teams to offer integrated solutions to
customers.
Brad Sharp, Sterling Commerce president and chief operating officer, said the
company is eager to leverage SBC's broad customer base and major strategic
initiatives such as Project Pronto, a $6 billion broadband network investment
that further positions SBC as a leading provider of advanced data solutions and
Internet services.
"We're proud of our substantial global customer base, but maximizing the value
of e-Marketplace communities means adding as many business partners as possible
to each client's community, and ultimately, growing the number of industry
communities," said Warner C. Blow, Sterling Commerce chief executive officer.
"SBC's powerful distribution channels and strong relationships with hundreds of
thousands of customers, especially small- and medium-size businesses which
typically aren't yet e-businesses, will considerably strengthen our ability to
serve more customers than ever before. Plus, aligning ourselves with America's
broadband leader gives Sterling Commerce the resources to focus on aggressive
development of advanced e-business software and services."
Whitacre said that in addition to being a top-performing e-business company,
Sterling Commerce is a solid fit with SBC's data communications and Internet
strategies. Business-to-business e-commerce, for example, is an ideal
application for high-speed, always-on broadband DSL connectivity.
"Like SBC, Sterling Commerce is an established company with a history of closely
consulting with business customers to create e-business solutions," Whitacre
said. "It also has an enviable track record of delivering innovative e-business
solutions and revenue growth, which are key indicators of why we believe that
this transaction will quickly create value for SBC business customers and
shareowners."
SBC also plans to use Sterling Commerce's services to further streamline SBC's
internal business processes and generate cost efficiencies.
Pursuant to the definitive agreement announced today, a cash tender offer will
be commenced by a wholly owned subsidiary of SBC to acquire all the outstanding
shares of Sterling Commerce common stock. It is expected that all shares not
purchased in the tender offer will be converted into the right to receive $44.25
per share in a second step merger following the tender offer. While the
transaction is not subject to Federal Communications Commission or state review,
the companies must make a Hart-Scott-Rodino filing with the U.S. Department of
Justice Antitrust Division and the Federal Trade Commission and will be required
to make certain filings with foreign competition agencies. In addition, the
tender offer will be conditioned upon the tender of a majority of the Sterling
Commerce shares on a fully-diluted basis (excluding options not exercisable at
the time the tender offer is consummated) and other customary conditions.
[Note to Media: Sterling Commerce is not affiliated with Sterling Software.]
The tender offer described in this announcement for the outstanding shares of
Sterling Commerce has not yet commenced, and this announcement is neither an
offer to purchase nor a solicitation of an offer to sell securities. The tender
offer will be made only through the Offer to Purchase and the related Letter of
Transmittal. We urge investors and security holders to read the following
documents, when they become available, regarding tender offer and merger
(described above), because they will contain important information:
o SBC's Tender Offer Statement on Schedule TO including the Offer to Purchase,
Letter of Transmittal and Notice of Guaranteed Delivery
o Sterling Commerce's Solicitation/Recommendation Statement on Schedule 14D-9.
These documents and amendments to these documents will be filed with the United
States Securities and Exchange Commission when the tender offer commences. When
these and other documents are filed with the SEC, they may be obtained free at
the SEC's web site at www.sec.gov. You may also obtain for free each of these
documents (when available) from the Information Agent for the offer, to be
announced.
Information set forth in this news release contains financial estimates and
other forward-looking statements that are subject to risks and uncertainties. A
discussion of factors that may affect future results is contained in SBC's
filings with the Securities and Exchange Commission. SBC disclaims any
obligation to update or revise statements contained in this news release based
on new information or otherwise.
Sterling Commerce, Inc. is a worldwide leader in providing E-Business
Integration solutions for the Global 5000 and their commerce communities. The
company is one of 40 companies included in the Dow Jones Internet Services Index
and one of 100 companies included in the USA Today Internet 100 Stock Index. The
company provides solutions to address E-Business Process Integration,
E-Community Management, E-Business Communication Infrastructure and E-Sourcing.
For more information, visit the Sterling Commerce Web site at
www.sterlingcommerce.com.
SBC Communications Inc. (www.sbc.com) is a global communications leader. Through
its subsidiaries - Southwestern Bell, Ameritech, Pacific Bell, SBC Telecom,
Nevada Bell, SNET and Cellular One - and world-class network, SBC provides local
and long-distance phone service, wireless and data communications, paging,
high-speed Internet access and messaging, cable and satellite television,
security services and telecommunications equipment, as well as directory
advertising and publishing. In the United States, the company currently has 90.4
million voice grade equivalent lines, 11.2 million wireless customers and is
undertaking a national expansion program that will bring SBC service to an
additional 30 markets. Internationally, SBC has telecommunications investments
in 23 countries. With more than 204,000 employees, SBC is the 13th largest
employer in the U.S., with annual revenues that rank it among the largest
Fortune 500 companies.
