US operator CenturyTel said Monday that it is to acquire ex-Sprint fixed line operation, Embarq, for around $5bn in stock.

Upon closing of the transaction, which reflects an enterprise value of approximately $11.6b, including $5.8bn in debt, Embarq shareholders will own approximately 66 per cent of the company and CenturyTel shareholders are expected to own the remainder.

The two companies have a combined operating presence in 33 states with approximately 8 million access lines and 2 million broadband customers.

The transaction is expected to generate synergies of approximately $400m annually within the first three years of operation.

US carrier Sprint spun Embarq off in 2006 as part of its merger with Nextel. Dan Hesse, who was at the time, head of the fixed line unit, then took over the reins as president and CEO of Sprint.

Although CenturyTel plays in the fixed line space, the company shelled out $148.9m for 69 A- and B-block licenses in the US 700Mhz auction that took place earlier this year, ahead of an expected wireless broadband play. “It provides CenturyTel the opportunity to deliver wireless voice and broadband data to a significant percentage of our current customer base, making CenturyTel the only on-net provider of both fixed and wireless broadband in many of our markets,” said the company at the time.

CeturyTel expects to provide additional information in late 2008 and early 2009 about its 700MHz deployment plans.