C&W may pick up MCI's Net assets

The telco giant may be close to selling its entire Internet business, stepping up approval of the company's pending merger with WorldCom.

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MCI Communications may be close to unloading its Internet business, stepping up approval of its pending $37 billion merger with WorldCom.

MCI is expected to announce as soon as tomorrow that it is selling its entire Internet holdings to Cable & Wireless, Bloomberg has reported.

Citing unnamed sources familiar with the companies' plans, Bloomberg said that C&W would pay between $1.5 billion and $2 billion in cash. It added that the Justice Department, which is investigating WorldCom's proposed purchase of MCI, was expected to announce its approval of the deal soon.

Antitrust enforcers from the Justice Department, 15 state attorneys general offices, and the European Commission all have been investigating the proposed merger since shortly after it was announced in November. Of particular concern to officials was the contention by competitors such as GTE and Sprint that the merged company might move between 45 percent and 70 percent of all Internet traffic.

Earlier this month, the European Commission conditionally approved the merger, contingent upon either WorldCom or MCI agreeing to divest their Internet holdings. The condition came after MCI had announced that it would sell its wholesale Internet holdings to C&W for $625 million. Critics of the merger balked at the move, saying that it did not go far enough.

DOJ spokeswoman Gina Talamona declined to discuss the agency's investigation, except to say that it is ongoing. An MCI spokesman declined to comment, and officials from United Kingdom-based C&W could not immediately be reached for comment.

MCI closed at 62 today, up 1.125 or 1.85 percent. WorldCom closed up 0.6875 or 1.37 percent at 51.