On this day in economic and financial history …
AT&T Inc. (NYSE:T) was first incorporated as the American Telephone and Telegraph Company on March 3, 1885. At first, it was a subsidiary of American Bell and was tasked with the construction and operation of the nation’s first long-distance telephone network. AT&T Inc. (NYSE:T) proved so successful at this task that it soon eclipsed its corporate parent in importance. AT&T Inc. (NYSE:T) became the heart of the Bell System when it acquired American Bell’s assets in 1899. By this point its long-distance lines, originating in New York, were already well established in Chicago and were building gradually toward a transcontinental network that could link New York with California, and all points in between.
AT&T Inc. (NYSE:T) became a transcontinental telephone monopoly in 1915 with the completion of the first call between New York City and San Francisco. Though thousands of local telecom competitors had sprung up between AT&T Inc. (NYSE:T)’s buyout of American Bell and its completion of the transcontinental lines, none could match Ma Bell’s reach, and it continued to be the dominant operator for decades. AT&T became part of the 20-component Dow Jones Industrial Average a year after inaugurating transcontinental telephony. It was removed in 1928, a year after becoming the first telecom to offer trans-Atlantic telephone service between the United States and the British Isles, but it was reinstated in 1939 and has remained ever since.
Between 1939 and 1984 (the year of its antitrust divestiture), AT&T became one of the largest and best-recognized companies in the United States. Telephone service reached 50% of the country in 1945 and rose to 90% in 1969. AT&T controlled nearly all of this service, thanks in part to what was essentially a government-endorsed monopoly allowed as a result of the Department of Justice’s failed antitrust suit of 1956. The consent decree that followed AT&T’s antitrust victory gave it largely free rein over American telephone service but barred it from participating in the nascent computer industry, clearing the way for fellow Dow component and onetime tech competitor International Business Machines Corp. (NYSE:IBM) to become a dominant force in computing.
Another antitrust effort (the third of AT&T’s lifetime) proved successful in 1983, breaking Ma Bell into multiple regional operators. The AT&T you now know was once SBC Communications, which began as the regional Bell in Texas, Missouri, Kansas, Illinois, Oklahoma, and Arkansas. It acquired the original AT&T in 2005 and adopted its name and branding shortly afterward.
The once and future king (of beers)
Interbrew and AmBev announced their intent to merge on March 3, 2004, in a deal that would see the combined company leapfrog global beer leader Anheuser-Busch InBev NV (ADR) (NYSE:BUD) to become the world’s largest brewer by volume. The end result of the merger was a company with roughly $12.5 billion in annual sales and a 14% share of the global beer industry, spanning 140 countries. In 20 of these countries, including six of the seven fastest-growing markets, the new company would be the largest or second-largest brewer.
Four years later, InBev made an offer Anheuser-Busch InBev NV (ADR)(NYSE:BUD) couldn’t refuse to become Anheuser-Busch InBev NV (ADR) (NYSE:BUD) in 2009, by far the world’s largest brewer. This newly enhanced company produced roughly 20% of the world’s beer a year after its merger was completed.