WORLDCOM Inc. said yesterday it would acquire MFS Communications Co. Inc. in a stock swap worth at least $14 billion (£8.75 billion), creating a giant international business communications company.

The combined company, to be called MFS WorldCom, will provide "a single source for a full range of local, long distance, Internet and international service over an advanced fibre optic network," Worldcom said in a statement.

The merged company will have current annualised revenue of about $5.4 billion, with more than 500,000 business customers throughout North America, Europe and Asia.

It will have an end to end fibre network with 95 000 miles of fibre in service or under construction connecting all major metropolitan areas in the United States.

"We are creating the first company since the breakup of AT&T to bundle together local and long distance services carried over an international end to end fibre network owned or controlled by a single company, said Mr Bernard J. Ebbers, president and chief executive officer of WorldCom.

MSF's stock leaped $8 to $42.875, while Worldcom fell $4.25 to $22.125 on Nasdaq at mid morning.

WorldCom said it expected significant cost savings from reduced line and access costs. The deal would position the combined company to take full advantage of the recent easing of telecommunications laws, it said.

MFS had already just completed a billion purchase of UUNET Technologies on August 12th. That merger created a single source for Internet, voice, data and video services over an international fibreoptic grid.

In the latest deal, which was unanimously approved by both companies' boards, each share of MFS common stock will be exchanged for 2.1 shares of WorldCom common stock.

"As of Friday's closing, the merger consideration for MFS stock is approximately $14 billion," the statement said.

Omaha, Nebraska based MFS is a leading provider of communication services for business and government.

Jackson, Mississippi based WorldCom is one of the nation's largest long distance telecommunications companies.

WorldCom said the companies hope to close the merger in four to eight months subject to federal regulatory approval. Shareholders will vote on the deal at special meetings.

Mr Ebbers, president and chief executive of WorldCom, will become president and chief executive of MFS WorldCom. MFS chairman and chief executive, Mr James Crowe, will become chairman of the merged company.

The combined company's board of directors will consist of an odd number of directors, with WorldCom designating one more director than MFS.