As Verizon (NYSE: VZ) Wireless’ acquisition of Alltel (NYSE: AT) nears, AT&T makes a buy of its own—but it won’t be enough to retain the No. 1 spot in the U.S. AT&T said today that it plans to acquire Centennial Communications Corp, a rural carrier that operates in Midwest and Southeast, for $944 million in cash. The carrier, which has 1.1 million customers, also operates in Puerto Rico and the U.S. Virgin Islands. With Verizon’s purchase of Alltel, the company became the largest U.S. carrier with 84.8 million, beating out AT&T (NYSE: T). In the deal, Verizon was able to significantly beef up its rural operations, which is something AT&T will also get from the purchase of Centennial. Together, AT&T and Centennial, will have roughly 76 million subscribers.

SEE ALSO: AT&T Acquires Wi-Fi Operator Wayport For $275 Million; Opportunity To Offload More Traffic

Under terms, Centennial shareholders will receive $8.50 a share for $944 million. Including net debt, the total value of the deal is about $2.8 billion. The acquisition will be subject to regulatory approval, the approval of Centennial’s shareholders and other customary closing conditions. Centennial’s largest shareholder—Welsh, Carson, Anderson & Stowe—also already agreed to vote in support of this transaction. AT&T hopes to close the deal by the end of the second quarter. Release.