) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depaCurrent Situation:

As of this writing, the MCI Board of Governors has given Verizon Communications Inc. one week to sweeten their $7.5 billion offer, otherwise they have no choice but to accept Qwest Communications’ $9.74 billion offer to purchase MCI Inc. If the Board does not receive a counter offer from Verizon Communications by May 3, 2005, then it will recommend its shareholders vote for Qwest’s offer. From all accounts (Noguchi Washington Post, 4/24/2005), Verizon is a stronger and more stable company with $71.3 billion versus $13.8 in 2004 revenue, 210,000 employees versus 42,000. Qwest carries more than $17 billion in debt and it plans to reduce its costs by $15 billion by cutting 15,000 employees after the merger while Verizon plans to cut about 7,000 jobs.

The Problem:

The question is: Can Qwest Communications break all rules of successful mergers and still survive? The driving force behind Qwest’s acquisition is the 60-70 percent of MCI shareholders, which consists of hedge fund investors (a group of super rich investors) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depar

the Board does not receive a counter offer from Verizon Communications by May 3, 2005, then it will recommend its shareholders vote for Qwest’s offer. From all accounts (Noguchi Washington Post, 4/24/2005), Verizon is a stronger and more stable company with $71.3 billion versus $13.8 in 2004 revenue, 210,000 employees versus 42,000. Qwest carries more than $17 billion in debt and it plans to reduce its costs by $15 billion by cutting 15,000 employees after the merger while Verizon plans to cut about 7,000 jobs.

The Problem:

The question is: Can Qwest Communications break all rules of successful mergers and still survive? The driving force behind Qwest’s acquisition is the 60-70 percent of MCI shareholders, which consists of hedge fund investors (a group of super rich investors) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depa

llion versus $13.8 in 2004 revenue, 210,000 employees versus 42,000. Qwest carries more than $17 billion in debt and it plans to reduce its costs by $15 billion by cutting 15,000 employees after the merger while Verizon plans to cut about 7,000 jobs.

The Problem:

The question is: Can Qwest Communications break all rules of successful mergers and still survive? The driving force behind Qwest’s acquisition is the 60-70 percent of MCI shareholders, which consists of hedge fund investors (a group of super rich investors) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depa

em:

The question is: Can Qwest Communications break all rules of successful mergers and still survive? The driving force behind Qwest’s acquisition is the 60-70 percent of MCI shareholders, which consists of hedge fund investors (a group of super rich investors) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depa

) with a strong interest in quick return on their investments. Since MCI just came out of bankruptcy, the bank creditors are not going to benefit with Qwest’s plan to cut 17,000 jobs and it is going to be very difficult to keep key employees. When key employees depart for other companies it is highly likely that customer service will suffer leading many of them to change their service providers. It is also feasible that Verizon could use its financial resources to build new networks to attract MCI’s corporate customers located in the Northeast region where it does business.

D?j? Vu:

MCI has been here before. The year was 1997 and British Telecom (BT) was ready to acquire MCI for $21 billion. Then BT discovered a discrepancy in MCI’s accounting and reduced its offer to $17 billion. Bernard Ebbers, at the time the Chief Executive of WorldCom stepped in and offered about $31 billion all in stocks. At the time, BT was in the same position that Verizon is currently—very stable and debt light. It appears that history is repeating itself. During the late 1990s and early 2000, several dotcom businesses failed because they did not follow proven business models. They thumbed their noses at well-established and functioning business practices.

Merger strategy and post merger integration:

Those conte