AT&T's broadband division to merge with Comcast

Comcast will merge with AT&T's broadband division in a deal worth about $52bn.

The deal ends a bidding contest for the largest US cable television operator.

AT&T's selection of the Comcast bid came five months after it spurned a $41bn unsolicited bid by the nation's third largest cable operator for the division as being too low.

The deal also includes about $20bn in AT&T debt.

Under the merger plan, AT&T will spin off its cable division and simultaneously merge it with Comcast, forming a new company called AT&T Comcast Corp.

The company's board met earlier this month to discuss bids for its broadband operations - including the possibility of spinning it off as a standalone business - but decided to have further discussions with bidders before making a decision.

Other companies that submitted bids for Denver-based AT&T Broadband were AOL Time Warner and Cox Communications.

Microsoft also considered increasing its stake in AT&T Broadband, or participating in a bid by Comcast or Cox in return for a stake.

AT&T broadband has about 13.8 million cable subscribers, including more than 3 million who use its digital video services, according to the National Cable Television Association.

The bidding process started after Comcast, the nation's No. 3 cable operator, made a $41bn hostile bid in July for AT&T Broadband.

Comcast's surprise offer came the day before the New York-based AT&T's spin-off of its wireless operation into an independent company, the first stage in a plan to break the communications conglomerate into five separate companies.