AT&T Inc said on Monday it would sell a 53 percent stake in its Yellow Pages business to private equity firm Cerberus Capital Management LP [CBS.UL}, which will pay AT&T $750 million in cash and take on $200 million in debt.

AT&T had said in January that it would consider selling the dwindling business, which generated about $3.3 billion in revenue in 2011. After the deal the telephone directory business will honor existing union contracts, the company said.

AT&T said it expects the deal to have a minimal effect on 2012 earnings and does not expect a material gain or loss.

(Reporting By Sinead Carew; Editing by Gerald E. McCormick)

AT&T