June 24, 2009 / 10:39 PM / 10 years ago

U.S. FCC approves CenturyTel-Embarq deal

WASHINGTON (Reuters) - The U.S. Federal Communications Commission approved a bid by telephone company CenturyTel Inc (CTL.N) to acquire bigger operator Embarq EQ.N, a source familiar with the regulatory process said on Wednesday.

The deal, which was widely expected to win regulatory approval, would create one of the biggest rural U.S. phone providers. The companies said on May 29 that they had received all the necessary approvals from state regulators.

In October, CenturyTel announced its plan to buy Embarq for $5.8 billion in stock and the assumption of about $5.8 billion debt. Under the deal shareholders of Embarq were expected to get 1.37 shares in CenturyTel for each Embarq share they own.

In a June 22 filing with the FCC, the companies agreed to maintain certain conditions, which expire three years after the closing date of the transaction.

In the filing, the companies said the merged company will maintain substantially the service levels that Embarq has provided for wholesale operations and improve the processing of wholesale orders.

The companies said the merged company will also make substantial additional investments in broadband services, such as providing faster speed Internet services.

Reporting by John Poirier in Washington and Sinead Carew in New York, editing by Leslie Gevirtz

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