CenturyTel to buy Embarq for $5.8 billion

US telephone and internet service provider CenturyTel Inc. agreed to buy Embarq Corp. for $5.8 billion in stock, helping the phone company to almost quadruple its already existing 2.1 million phone lines.┬á Embarq, the former landline arm of Sprint Nextel Corp. which split in 2006, provides service to rural areas and smaller cities in 18 states across the US, and is the main telephone company for Las Vegas. ┬á CenturyTel covers mainly rural areas of regions in the South and Midwest, from Louisiana to Minnesota, and also provides service to Colorado and the Northwest. ┬á The acquisition will allow CenturyTel to gain additional subscribers in regions not yet serviced by the phone company, as two-thirds of EmbarqÔÇÖs business is in Florida, North Carolina, Nevada, and Ohio.┬á The companies said the deal should also make it easier and more attractive to advance the companiesÔÇÖ phone networks for broadband, video service, and wireless data, and should expect ÔÇ£synergiesÔÇØ of $400 million a year by cutting corporate overhead costs and eliminating duplicate functions. ┬á The deal maintains a trend of consolidation for traditional local phone services, as the market is dwindling as people turn to cable companies or cell phones for their calling needs. The combined company would maintain close to 8 million lines in 33 states, covering mainly rural areas.┬á Although CenturyTel is the acquirer, Embarq shareholders will still have control of two-thirds of the combined company, and will receive 1.37 shares of CenturyTel for each share of Embarq. ┬á The name of the new company has yet to be determined and, pending regulatory approvals, the deal is expected to close in the second quarter of next year.