AT&T Merger and Acquisition Activity – Dividend Reinvestment Plan

AT&T Merger and Acquisition Activity - Dividend Reinvestment Plan

AT&T is an American international corporate conglomeration holding company, also known as AT&T Corporation. It is one of the largest telecommunications companies in the United States and is a major provider of digital telephony and high-speed internet services to consumers across the United States. AT&T was founded by two men: AT&T founder Robert Pike and brothers Ralph and David Reed. They had spent years working together in the defense and communications industries. The company later went public in November 1996.

AT&T stockholders received one share of each for each of their named accounts on AT&T’s public stock market. T stock was first listed on the Pink Sheets, but was delisted in March 1997 when it was decided that the company was in poor financial shape. In August of that year, Pike and Reed sold most AT&T stock in order to provide liquidity to the company’s operations. The sale included all of AT&T’s common stock and Class A and Class B shares of its preferred stock.

During the last quarter of fiscal year 1996, AT&T again faced cash flow problems, which lead to a third straight year of losses. However, it turned out that despite the loss in its capitalization, AT&T managed to increase its market cap by almost thirty percent in a brief time period. This was mainly due to AT&T’s acquisition of VIA Technologies, which has its main facility in Atlanta. VIA is a major Southfield Communication Company, which also happens to be AT&T’s largest acquisition ever. AT&T stock investors saw their stock price appreciated by more than twenty percent in the last quarter.

AT&T stockholders will receive two thirds of their shares in AT&T through a cash-out transaction called a “cash out”. AT&T will receive cash from the purchase of VIA Technologies from E.ON. Cash out transactions are also commonly referred to as split sales or an acquisition transaction. AT&T will then give its holders (stockholders) a seventy-five percent vote for the acquisition of VIA Technologies. So, AT&T stockholders have a say during the negotiations for the purchase of AT&T.

An attractive reason for AT&T to offer this kind of acquisition transaction is that they expect that the cost of maintaining its acquired patents will be lower than the cost of maintaining its own patents. AT&T expects its cost per patent to increase by about five percent annually through the next five years due to an aging population with more health issues. Moreover, AT&T expects that the cost per shareholders will decrease by about five percent annually due to an aging population with more senior citizens. The combination of these two factors should yield positive dividends by the end of the next five years. You can check at for more details about NYSE T stock