Contel - History - Acquisition By GTE

Acquisition By GTE

In 1990 ConTel completed the biggest acquisition in its history, a $1.3 billion purchase of McCaw Cellular Communications, Inc.'s controlling interests in 13 cellular markets, which added more than six million potential customers and doubled ConTel's cellular potential population market (known in the industry as POPs). While important, that move was eclipsed by the merger with GTE announced later that same year. Through that transition, the two former competitors were expected to integrate telephone and mobile-cellular operations and capitalize on business unit similarities in the field of satellite communications as well as in communications systems and services targeting government entities.

Following action or review by more than 20 governmental bodies, in March 1991 the merger of GTE and ConTel was approved. Over half of ConTel's $6.6 billion purchase price, $3.9 billion, was assumed debt. When Charles Lee succeeded James (Rocky) L. Johnson to become CEO in 1992, his first order of business was reduction of that obligation. He sold GTE's North American Lighting business to a Siemens affiliate for over $1 billion, shaved off local exchange properties in Idaho, Tennessee, Utah, and West Virginia to generate another $1 billion, divested its interest in Sprint in 1992, and sold its GTE Spacenet satellite operations to General Electric in 1994. As of 2012, the Contel logo appears on the site map of Verizon's website, as to maintain the trademark.

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