AT&T 'set to acquire BellSouth for $65b'

New York: AT&T is nearing a deal to acquire BellSouth for $65 billion, according to reports published on Sunday.

The companies were expected to announce the terms of the deal as soon as today, according to reports in the Wall Street Journal and New York Times. Both papers cited unidentified sources, due to the sensitivity of the negotiations.

Larry Solomon, vice-president of corporate communications for AT&T, declined to comment on Sunday to The Associated Press. Messages left for BellSouth spokesman Jeff Battcher were not immediately returned.

AT&T would pay around $37 per BellSouth share, according to the Journal, about an 18 per cent premium to Friday's closing price of $31.46 on the New York Stock Exchange. BellSouth shares have already risen 16 per cent in 2006.

Atlanta-based BellSouth is the dominant local telephone provider in nine Southeastern states, while San Antonio-based AT&T's local-service customers are concentrated in 13 states, including Texas, California, and the Midwest.

Together, AT&T and BellSouth could have combined market capitalisation of nearly $160 billion, dwarfing rival Verizon Communications.

The merged company would have 70 million local-line phone customers and nearly 10 million broadband subscribers. The two companies also own Cingular Wireless, the largest wireless carrier in the United States, and Yellowpages.com, an online directory.