Verizon communication is one of the major telecommunications companies in the United States. The company has been the exemplary case on topic for acquisitions and mergers which were the major reason it was formed in the first place. Looking at the companys history, one will realize that the alliances and consolidations it has undergone with other companies have been of use to its goals the communication company. This research paper aims at taking a closer look at the formation of the company and its existing history of alliances and consolidations. Furthermore, the paper will consider specific aspects including the alliance partners and the rationale behind the establishment of these business relationships.
First, we consider the formation of the company Verizon Communications. The company was formed in June 2000. This was due to a Federal Communications Commission legal order that approved the merger of two large communications companies namely GTE and Bell Atlantics for the sole purpose of preserving competition between local telephone companies. This merger leading to the inception of Verizon Communications made the company the largest telephone company in the United States (Cummings & Holmberg, 2012). Second, Verizon Communications acquired MCI (WorldCom) in March 2005. This rationale behind this acquisition led to Verizon getting access to MCIs presence in global markets. MCI gave Verizon the chance to make use of its international holdings and one million corporate clients to expand their presence into global markets through the formation of a company division to serve its new government and business customers.
Third, the month of May in the year 2007 saw Verizon acquire Cybertrust. The company is a privately held provider of information security services on a global basis. This acquisition was deemed to have a security rationale behind it. The rational was the ability of Verizon to provide its global enterprise customers with security solutions. Fourth, Verizon wireless, a mobile wireless provider which is also a subsidiary of Verizon communications purchased wireless carrier Alltel in June 2008. The rationale behind the acquisition was to enable the growth of the number of customers by adding Alltels 13 million customers to reach new markets in rural areas (Cummings & Holmberg, 2012).
Recently, in 2011, Verizon acquired a company named Terremark. The company provided information technology services. Furthermore, as a business strategy to expand their growth in key areas like wireless (Yoo, 2014), Verizon Communications purchased Hughes Telematics. This company produced wireless features for automobiles. Moreover, in August 2012, Verizons purchase of AWS (Advanced Wireless Systems) was approved by the department of justice. The move aimed at making this purchase was to increase the companys net growth in areas which majorly included wireless.
Due to the foreign ownership issues of Verizon Wireless, Verizon Communications purchased a 45 % stake in Verizon Wireless in February 2014 from Vodafone giving it sole ownership of Verizon wireless. The acquisition by Verizon Communications did not stop here, in August 2016, Verizon announced its acquisition of Telematics. The rationale behind the acquisition of the Fleet telematics company was to get Verizon the ability to build products it offers to enterprises for logistics and mobile workforces. The company went on to acquire a mapping startup SocialRadar to use its technology in its MapQuest project. All the acquisitions and purchases of other companies done by Verizon were due to the gaining of a given strategic market, technology or control over different market niches in the telecommunications industry.
Cummings, J. L., & Holmberg, S. R. (2012). Best-fit alliance partners: the use of critical success factors in a comprehensive partner selection process. Long Range Planning, 45(2), 136-159.
Yoo, C. S. (2014). Merger Review by the Federal Communications Commission: Comcast NBC Universal. Review of Industrial Organization, 45(3), 295-321.
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