WASHINGTON -- The Justice Department will file suit to block the proposed $129 billion merger of communications giants WorldCom and Sprint, the companies announced Tuesday.
The announcement came a day after the European Union's antitrust chief said the companies had offered a ''less than satisfactory'' response to concerns of overseas regulators that the combination would dominate high-level Internet access around the world.
WorldCom and Sprint are the nation's second- and third-largest phone companies.
In announcing the Justice Department's opposition, Michael Salsbury, WorldCom general counsel said in a written statement: ''WorldCom will promptly review its options with Sprint.''
Sprint General Counsel J. Richard Devlin added: ''Over the next several days we will determine our next steps.'' He added that Sprint had ''presented an overwhelming case in support of the merger.''
''Sprint hopes that a sensible conclusion to this merger can be reached,'' Devlin added. ''The public benefits are too great to pass up.''
In early trading Tuesday, shares of Sprint were up 75 cents to $60.313, while shares of WorldCom were up $1.1888 to $38.688.
Two other major media mergers -- American Online with Time Warner and AT&T with MediaOne -- also are under attack.
Mario Monti, who is in charge of antitrust affairs for the European Union, said the European Commission suggested WorldCom and Sprint might be able to amend their proposal but ''only under exceptional circumstances.'' He declined to comment on what such circumstances might be, but later added that if those standards were not met, ''Then my proposal to the commission would be to prohibit the merger.''
The commission must make its decision July 12. European approval is vital because WorldCom has substantial assets in Europe.
Monti said the companies could refile their proposal with the EU in the future.
But that still would leave the merger with big problems in the United States. The staff of Justice Department antitrust chief Joel Klein because is concerned that the companies would dominate U.S. long-distance service and Internet access.
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