Private equity firm Cerberus Capital Management has agreed to acquire a majority stake of AT&T’s (News - Alert) Yellow Pages business unit, which will be rebranded under the name YP Holdings LLC.

AT&T will still maintain a 47 percent equity interest in the new entity but will hand over the controlling stake in the unit to Cerberus for $750 million in cash and the assumption of $200 million in debt.

The transaction includes around 1,200 Yellow Pages print directory titles – reaching about 150 million homes and businesses in 22 states – as well as YP.com and The YP Local Ad Network, which is said to comprise more than 300 mobile and online publisher websites.

AT&T announced its intention to sell the business unit back in January to concentrate its efforts more on its wireless initiatives, according to Reuters. While the Yellow Pages entity has lost some of its cache with increased competition from mobile apps, the telephone directory business still generated around $3.3 billion in revenues in 2011.

“This transaction makes strategic sense for both AT&T and Advertising Solutions,” said José Gutiérrez, president and CEO of AT&T Advertising Solutions. “It enables AT&T to focus on its core strategy of leadership in wireless, IP, cloud- and application-based services. At the same time, it gives our advertising customers, partners and developers continued access to strong advertising and search innovation and performance.”

AT&T said that the new business unit with continue to honor existing union contracts. The deal is expected to close in mid-2012 pending federal approval. The transaction will have a “minimal effect” on 2012 earnings and is not expected to result in a material gain or loss for AT&T, the Dallas-based carrier noted in a statement.

The deal will include the two main Yellow Pages ventures – AT&T Advertising Solutions and AT&T Interactive – but not AT&T AdWorks, a New York-based business unit that sells advertising offerings across online, mobile and TV platforms.