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CenturyTel and Qwest to merge

CENTURYTEL said yesterday it will buy Qwest Communications in a $10.6bn stock deal, combining the third and the fourth biggest US landline phone companies to help them compete more aggressively and cut costs.

CenturyTel offered a 15 per cent premium to Qwest’s market price, and expects the acquisition to add to free cash flow right away, estimating savings of about $625m over three to five years.

CenturyTel is changing its name to CenturyLink, but will use Qwest’s brand for business services.