AT&T Inc. on Sunday agreed to acquire BellSouth Corp. for about $67 billion, to expand its reach into the southeastern United States and acquire the rest of Cingular Wireless it does not already own.

AT&T is expected to pay about $65 billion for BellSouth, the country's third largest phone company, which operates in a nine-state region in the Southeast. The price represents a 25 percent to 30 percent premium for BellSouth shareholders. The combined company would have more than $125 billion in sales, 70 million local-line phone customers and nearly 10 million broadband subscribers.