Frontier, ALC Announce Plans to Merge : Telecom: Union would create the nation’s fifth-largest long-distance telephone company.

Frontier Corp. said Monday that it has agreed to acquire ALC Communications Corp. in a $1.8-billion stock merger that would create the nation’s fifth-largest long-distance telephone company.

Amid other takeovers and regulatory changes in telecommunications, the companies decided to join forces to better position themselves and compete with the giants--AT&T;, MCI, Sprint and LDDS.

“Clearly, consolidation of the telecommunications industry has begun and . . . in a rather aggressive and fierce fashion,” said Marvin Moses, chief financial officer of ALC, based in suburban Detroit. “What we believe this transaction does is give us critical mass, gives us the scale and scope to be a viable competitor.”

The new Frontier Corp. would have more than 2 million customers in the United States and combined revenue approaching $2 billion, including long-distance revenue of about $1.4 billion. It would employ 6,500 people.

The deal, approved by the boards of both companies, must be ratified by shareholders at separate meetings scheduled for August.

The boards agreed on a deal under which ALC shareholders would get two shares of Frontier stock for every ALC share they now own. That would give ALC a 49% stake.

Frontier stock fell $3 to $19.75 on Monday on the New York Stock Exchange. ALC shares rose $3 to $36.25 on the American Stock Exchange.

The long-term strategy is to build a wide-ranging system of wireless services, said Ronald L. Bittner, chairman and chief executive of Frontier, who will retain those titles after the merger.

Frontier generated $985 million in revenue last year and has about 1.5 million customers for its long-distance and local telephone and wireless communications services. It was previously the seventh-largest long-distance carrier; ALC was No. 6.

“We’ve had as a goal for our firm to grow to four to five times its size by the year 2000,” Bittner said.

ALC had $568 million in revenue last year. It provides long-distance products and services through its Allnet Communications Services division to small and medium-sized businesses.

ALC President and Chief Executive John M. Zrno will be vice chairman of the new Frontier, and Moses will remain chief financial officer. It will be at least a year before the new company decides whether it will be based in Rochester or Detroit.

Frontier changed its name Jan. 1 from Rochester Telephone Corp. In December, shareholders approved an innovative restructuring plan that opened the city in western New York to competition for local phone service.