SBC Communications Inc on Monday said it would buy AT&T Corp for about $16 billion, making SBC the largest US telecommunications company and ending AT&T's independence after suffering a two-decade decline after losing its US monopoly. The purchase, which will face antitrust hurdles, will make SBC the largest US provider of landline and wireless communications service to homes and businesses with about $90 billion in annual revenues.

"We've seized a great opportunity and asset in AT&T," SBC Chairman Ed Whitacre told a conference call with analysts. "We obtained these assets for a fair price that will pay for itself in a very short period of time."

SBC's acquisition of the No 1 long-distance carrier includes $14.7 billion in SBC stock and a special cash dividend of roughly $1.04 billion to be paid by AT&T to its shareholders when the deal closes.

SBC will issue 0.78 of a share for each AT&T share, valuing AT&T at $18.41 a share. AT&T will then pay a special dividend of $1.30 a share. Combined, the deal would value AT&T at $19.71 a share - equal to its closing stock price on Friday.

Copyright Reuters, 2005