Deutsche Telekom has sole T-Mobile USA to opponent ATT for $39bn (24bn), formulating the largest US wireless network.
The treat sent Deutsche Telekom shares surging. They non-stop 16.3% aloft - a record burst - and closed 11% up. In New York, ATT shares gained 1.3%.
The treat still needs consent from regulators.
It moreover gives the German telecoms hulk the money to purchase back shares and pay dividends.
Deutsche Telekom mentioned it would pay 3.4bn euros ($4.8bn; 3bn) in dividends between 2010 and 2012, pay down debt and outlay 5bn euros on share buy-backs in the 3 years after the deal.
ATT will pay $25bn in money and the rest in stock, whilst Deutsche Telekom will keep an 8% interest in the US carrier.
The treat means that ATT is effectively about spending more than $1,000 per T-Mobile patron to pull ahead of the attention personality Verizon Wireless.
If the treat is approved, ATT will have about 43% of the US mobile market.
ATT has been seeking to enlarge its network ability to hoop the hurriedly stepping up consumer urge for videos and data.
However, analysts mentioned that the treat might infer controversial.
Consumer rights organisation Public Knowledge mentioned that the treat would lead to "higher prices, fewer choices, reduction innovation".
US conduit Sprint moreover uttered their concerns about the size of the amalgamated company.
The phone companies countered that the US marketplace was aggressive and call prices had declined in new years as a result.
ATT mentioned regulators might inquire it to sell a few properties as a condition for approval.
It mentioned it expects the treat to be finished in 12 months.
ATT arch senior manager Randall Stephenson told reporters the firm had done its task on the regulatory side of things.
"This is a unique opportunity," Mr Stephenson said.
"It's singular you have exchange where the synergies are larger than the cost paid."
Mr Stephenson took over as arch senior manager in 2007.
The same year, ATT began selling Apple iPhones, and wireless information has given turn one of its fastest flourishing services pushing revenues up.
ATT mislaid its disdainful rights to bring the iPhone in US this year when Verizon Wireless began selling its own chronicle of the device.
T-Mobile has reported descending gain after omitted out on the iPhone and unwell to erect a higher-speed wireless network.
The T-Mobile treat would be a way for ATT to speed up gain by mixing operations.
But its users will not obtain access to the ultimate incarnation of the iPhone, T-Mobile mentioned on its website. "T-Mobile USA waste an eccentric company. We do not offer the iPhone," the firm said.
The firm is calculating approximately that it could produce extra savings of more than $40bn.
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