IBM Buys AT&T's Sterling For $1.4 Billion

IBM agrees to buy Sterling Commerce from AT&T for about $1.4 billion in cash.
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NEW YORK (TheStreet) -- IBM (IBM) - Get Report agreed to buy Sterling Commerce from AT&T (T) - Get Report for about $1.4 billion in cash.

IBM said the acquisition of the business-software maker will expand its ability to help businesses create simpler and better communication networks with their customers.

The companies expect the deal to close in the second half of the year. AT&T expects to record a one-time pretax gain of about $750 million in the quarter when the transaction closes.

Bandwidth Junkies (Forbes)

After the deal closes, about 2,500 Sterling employees will be integrated into the WebSphere organization within IBM's software division.

AT&T shares were flat at $24.86 in premarket trading Monday; IBM stock was lower by 0.1% to $125.24.

AT&T Sell AT&T!: Against the Grain

-- Reported by Andrea Tse in New York

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