MCI VICTORIOUS IN TAKEOVER FIGHT FOR SPRINT.

Byline: Laura M. Holson and Seth Schiesel The New York Times

MCI Worldcom, the nation's second-largest long-distance telephone company, will acquire Sprint Corp. in a stock swap valued at $108 billion, said people close to the deal.

The deal, which would be the largest acquisition in corporate history, caps the takeover battle for Sprint, the nation's third-largest telephone company. Sprint had been discussing a merger with MCI Worldcom for two weeks but received a $100 billion unsolicited offer Saturday from BellSouth, the Atlanta-based Baby Bell company, prompting MCI Worldcom to raise its bid Monday.

On Monday, BellSouth also raised its bid, but the extra cash it offered was not enough to sway Sprint's board. MCI Worldcom also amended its offer in an effort to make it even more attractive to the Sprint board.

William Esrey, Sprint's chief executive, favored a merger with MCI Worldcom all along, according to people close to negotiators, because he believes an MCI Worldcom-Sprint combination has a better chance of being approved by regulators and more attractive long-term growth prospects.

In the deal, MCI Worldcom gains Sprint's nationwide wireless operation, a crucial tool in competing with AT&T Corp., which has a national wireless network of its own.

Combined, MCI Worldcom-Sprint would still be smaller in terms of revenue than AT&T.

Boards of both MCI Worldcom and Sprint approved the merger Monday night, said people involved in the deal.

BellSouth will re-evaluate its options. Analysts consider it unlikely that BellSouth will make a hostile offer for Sprint in the short-term.

The deal is the latest in an increasingly long list of multibillion-dollar takeovers in the whirlwind telecommunications industry, unleashed by the deregulatory Telecommunications Act of 1996. In the litany of mergers, seven of the original Baby Bells have agreed to become four, and now the four biggest long-distance companies have decided to become two.

Top executives for most big communications carriers believe the communications scene of the next decade will be dominated by a mere handful of global behemoths, and they all want their companies to be or merge into one of the few. They want to offer the full panoply of local, long-distance, wireless and data services, and they want the geographic scale needed to serve the far-flung offices of big-business customers, if not always rural consumers.

Still, it was something of a surprise to industry experts that Sprint became the object of a struggle between MCI Worldcom and BellSouth.

Bernard Ebbers, MCI Worldcom's chief executive, was informed by advisers last July that Esrey was interested in discussing a deal with him. At Sprint, Esrey had been approached by Ron Sommer of Germany's Deutsche Telekom, which had long coveted Sprint, about a friendly merger.

But it was not until mid-September that discussions between MCI Worldcom and Sprint began to take shape.

Sprint has two separately traded stocks: one for its local and long-distance business, the other for its wireless business. MCI Worldcom is offering a little more than one share of its stock for each Sprint share in its local and long-distance business, valued Monday at about $76, or $68.4 billion. MCI Worldcom will also swap shares of its own stock for shares in the wireless company valued at $33.7 billion, offering investors a premium of 0.1547 in MCI Worldcom stock, or $5.4 billion. To add to that, MCI Worldcom is offering price protection for Sprint shareholders in case MCI Worldcom's stock price plummets.