Engadget Mobile is reporting via The New York Times that AT&T is buying Centennial Communications for $944 million in cash. The New York Times says that the price is more than double Centennial's stock market value.

Darren Murph over at Engadget Mobile says that the transaction will beef up AT&T's coverage for customers who live in rural areas of the Midwest and Southeast United States, plus Puerto Rico and the US Virgin Islands. Hey, maybe it'll beef up my coverage since I live in the rural Southeast.

From AT&T's press release:

"Mobility is a vital investment area for AT&T and our company's biggest growth driver," said Ralph de la Vega, president and chief executive officer of AT&T Mobility and Consumer Markets. "This transaction enhances network coverage for our consumer and business customers and is expected to create long-term value for AT&T's stockholders.

According to The New York Times, AT&T is locked in a fierce battle with Verizon Wireless to dominate the nation's cellphone service business. When Verizon acquired Alltel in June, they surged past AT&T as the dominant presence in the field.

The acquisition must first pass regulatory approval, approval of Centennial's stockholders and other customary closing conditions. AT&T's press release states that Centennial's largest stockholder, Welsh, Carson, Anderson & Stowe, has agreed to vote in support of this transaction.

You can read the full press release here.

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