GTE Buying Portion of Ameritech Cellular Business

Irving, Texas--GTE Corp., which is being acquired by Bell Atlantic Corp., agreed on Monday to buy about half of Ameritech Corp.’s cellular phone business in the Midwest for $3.27 billion in cash, accelerating a plan to provide wireless services nationwide.

Ameritech is selling the properties to eliminate overlap with SBC Communications Inc., clearing the way for antitrust approval of its own pending $79.2-billion sale to SBC.

The sale of the businesses in the Chicago and St. Louis areas and northwestern Indiana, which have about 1.7 million customers, is contingent upon regulatory approval of the SBC deal, Ameritech said.

The purchase would boost GTE-Bell Atlantic’s total wireless customers to 13 million, the most of any company in the U.S., and help them compete with coast-to-coast providers such as AT&T; Corp. and Sprint PCS.

Georgetown Partners, a closely held investment company, will buy a 7% stake in the Ameritech properties for $60 million and will assume about 7% of the debt, said Chester Davenport, Georgetown’s chairman. Davenport will head a subsidiary GTE plans to set up to run the Ameritech properties.

GTE said the purchase would be “slightly dilutive” to earnings in the first year, though the effects on the combined Bell Atlantic-GTE would be “insignificant.”

The boards of GTE, Ameritech and Georgetown Partners have approved the sale. Bell Atlantic has agreed to support the transaction.

Irving, Texas-based GTE fell 56 cents to close at $60.19, while New York-based Bell Atlantic rose 13 cents to $51.88. Chicago-based Ameritech jumped $2.38 to $62.63, and San Antonio-based SBC rose $1.06 to $50.81. All trade on the New York Stock Exchange.