Financial times is reporting that the fourth largest regional telecommunications group, Qwest Communications International, and the second largest US long-distance carrier, MCI could announce a merger agreement as soon as Monday, according to people in the know. Qwest expects to save between $2.5bn and $3bn in annual costs as a result of the merger. The company will pay about $6.5bn for MCI. Earlier Reuters reported that either Verizon or BellSouth might still enter the bidding. MCI's shareholders apparently think the company is worth much more even though MCI emerged from Chapter 11 bankruptcy protection a year ago. Shares gained 88 cents to close at $21.03 on Friday - the highest closing since April 15. The market values MCI at $6.69bn. Qwest's shares also rose on Friday 10 per cent increase. The market values Qwest at about $8.81bn. Analysts calculate MCI would add about $2bn a year in cash flow to Qwest which would help the Denver-based company continue to service its $17bn in outstanding debt