SBC Communications and AT&T on Monday said they had approved a $16bn merger that will create the largest telecommunications company in the US and end AT&T’s 120-history as an independent company.

Under the terms of the deal approved by both boards, shareholders at AT&T will receive stock worth $18.41 a share and a special dividend of $1.30 a share. This means SBC is paying AT&T shareholders a combination of just under $15bn in stock and just over $1bn in cash.