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ATLANTA (AP) -- Cingular Wireless won the bidding war to acquire AT & amp;T Wireless Services for nearly $41 billion in cash, a deal that would create the nation's largest cell phone company.
The merger between the second and third largest U.S. wireless companies was announced as Britain's Vodafone Group PLC withdrew from the contest after four days of rising bids.
"This combination is expected to create customer benefits and growth prospects neither company could have achieved on its own and will mean better coverage, improved reliability, enhanced call quality and a wide array of new and innovative services," said Stan Sigman, president and chief executive of Atlanta-based Cingular.
Winning bid
Cingular, a joint venture between SBC Communications Inc. and BellSouth Corp., said its winning bid was for $15 per share, an amount that would value AT & amp;T Wireless at $40.7 billion. Cingular will also assume $6 billion of debt owed by AT & amp;T Wireless.
The agreement, subject to the approval of AT & amp;T Wireless shareholders and regulatory authorities, may be the largest all-cash transaction in U.S. history, said David Caouette, spokesman for AT & amp;T Wireless.
In addition to paying AT & amp;T Wireless shareholders a 27 percent premium over the company's closing stock price of $11.82 on Friday, the merger may ease the cutthroat competition in the U.S. cellular market, trimming the number of national players from six to five.
Combined, Cingular and AT & amp;T Wireless have 46 million subscribers, enough to leapfrog Verizon Wireless' market-leading customer base of 37.5 million.
Layoffs
The companies did not say how many layoffs might result from the deal. Caouette indicated some employees would be affected because large-scale mergers create "duplicate functions" that can be eliminated. AT & amp;T Wireless had already planned to cut 1,900 jobs from a work force of 31,000 by the end of 2005.
John D. Zeglis, AT & amp;T Wireless chairman and CEO, said in a statement that the transaction means "a handsome return" for investors, advantages for customers and more opportunities for employees.
The deal brought to an end a heated bidding war that saw both companies boosting their offers following a Friday deadline to submit bids set by AT & amp;T Wireless.
Cingular, which had 23.4 million customers late last year, opened its bidding at $13 a share, or $35 billion, two sources told The Associated Press on condition of anonymity. It then raised its offer to $14 a share early Monday; Vodafone matched Cingular's offers in each stage of the process, a source said.
A Vodafone deal would have required the British cell phone giant to sell its 45 percent stake in Verizon Wireless.
AT & amp;T Wireless' share price has risen steadily in recent weeks on news that it was putting itself on the auction block.