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Notebaert: Qwest Scanning for M&A Options

Responding to questions about whether Qwest Communications International Inc. will need to merge with another company as its Bell brethren have done, Qwest CEO Richard Notebaert said Thursday company executives continue to scan the horizon for opportunities to merge with or acquire other companies.

His comments were made at the companys Qwest Business Partner Program event, QMarketplace, which was held in Denver this week.

Notebaert said the company has been looking for match-ups since he walked in the door in summer 2002. Qwest lost a high-profile bidding war for MCI Inc. to Verizon Communications Inc. in May 2005. But, other targets have been considered, such as CLEC Allegiance, which merged with XO Communications Inc. in June 2004.

Notebaert said these days, the scope of companies Qwest might be interested in buying extends beyond telecom to networking or other disciplines adjacent to either side of Qwests core business.

The first consideration for any pairing is whether the entities are strategically complementary, he said, explaining there needs to be an overlap in networks or assets that can be eliminated to optimize operations and control costs.

Assuming they make it through the first filer, the second criteria is, whats the price? Notebaert said. If the price point you pay eliminates the value of being strategically complementary thats code for too-high-a-price then you dont do it.

Meanwhile, he said there is a significant opportunity to grow Qwests business organically. You do that, but if something pops up, we will look at it, he said.

There is no question about it, there will be more industry consolidation, he added.

Qwest Communications International Inc. www.qwest.com

 


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