GTE May Not Close Its Contel Deal Til Mid-’91

GTE Corp. said Monday that its proposed merger with Contel Corp. may be delayed until almost mid-1991 because of a lengthy regulatory process.

The merger would create the largest U.S. telephone company and the nation’s second-biggest cellular phone company, with 49 million potential customers, GTE said.

The Stamford, Conn.-based company said the merger, which is subject to approvals by the Department of Justice, the Federal Communications Commission and various state public utilities commissions, may not be concluded until late in the second quarter of 1991. Analysts had predicted that the deal would be wrapped up by the end of this year.

Contel and GTE said they have filed all of the necessary applications and expect to receive the needed approvals. Shareholders will vote on the merger at a Dec. 11 special meeting.

GTE owns the largest non-Bell telecommunications system. Telephone revenue has accounted for 70% of its revenue in recent years.

The merger would be implemented through a stock swap, Contel shareholders receiving 1.27 shares of GTE common for each Contel share.

Chairman Charles Wohlstetter said the merger offers Contel shareholders “a tax-free exchange for shares in a company that will be financially stronger and more competitive and have greatly enhanced marketing and technological resources.”

GTE had 1989 revenue of $17.4 billion. Atlanta-based Contel’s revenue was $3 billion last year.