agreed to merge its cable unit into
in a $72 billion transaction that will leave existing AT&T shareholders with a 56% equity stake in the combined firm.
The new company will have more than 21 million customers. The two firms don't currently compete head-to-head in any markets, which could lessen regulatory opposition to the deal.
The pact ends a five-month auction in which AT&T entertained bids from
AOL Time Warner
Comcast will issue $47 billion in new stock to AT&T shareholders, giving them a 56% equity stake and a 66% voting stake in the new firm, while the family of Comcast president Brian Roberts will control one-third of the combined entity's voting interest.
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Comcast will also assume $25 billion in debt, including $5 billion of convertible preferred stock owned by
AT&T Chariman Michael Armstrong will be chairman of the new firm, which will be called AT&T Comcast, while Roberts will be chief executive. The transaction is expected to close in mid-2002.