Donnelley Agrees to Buy Dex Media

Phone directory company R.H. Donnelley Corp. said Monday that it agreed to buy Dex Media Inc. for $4.2 billion in cash and stock, which would create the No. 3 directory publisher in the United States.

The deal, which is expected to close in the first quarter, comes after several years of big change in the directory publishing business and would create a company with business in 28 states and more than 600 directories with a circulation of 73 million.

It would also give the combination a stronger presence in online directories.

The deal calls for each Dex share to be exchanged for $12.30 in cash and 0.24 Donnelley share, amounting to about $27.58 based on Friday’s stock prices.

Dex shares hit a year high of $29.21 on Sept. 20.

The new company would be named R.H. Donnelley and would have headquarters in Cary, N.C. Donnelley, the smaller of the two directory publishers, would also assume about $5.3 billion in Dex’s debt.

The deal is subject to regulatory and shareholder approval.