Baby Bell seeks merger with ex- parent AT&T

US regional phone company SBC Communications is in talks to buy former parent AT&T for at least $15 billion, according to…

US regional phone company SBC Communications is in talks to buy former parent AT&T for at least $15 billion, according to media reports.

Executives are describing talks about the deal as "fluid" and "very, very sensitive"; such a deal would reunite SBC - with some 50 million local-line customers - with its much-diminished former parent.

The The New York Timesput the value of the potential deal at more than $16 billion, a premium of at least 9 per cent to AT&T's current value.

The Wall Street Journal, said executives of both companies had met intermittently for the past few weeks to discuss a possible link-up, which would likely cost SBC well over $15 billion.

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AT&T and SBC could not immediately be reached for comment.

The news comes after a rough year for fourth-ranked AT&T, which cut 14,000 jobs and wrote down its assets by $11.4 billion in 2004 in the face of competition from local operators known as "Baby Bells".

SBC, by contrast, is on the rise after its Cingular Wireless joint venture paid $41 billion last October to take over AT&T Wireless and become the largest US wireless service company.

SBC owns 60 per cent of Cingular, with BellSouth owning the remainder.