The first time the heads of the nation's second- and third-largest long-distance telephone companies sat down to talk seriously about combining their futures, they started with a subject remote from the realm of market share and earnings multiples.

It was mid-July. Inside the conference room at Sprint's airplane hangar near the company's Kansas City, Kan., headquarters, Bernard J. Ebbers of MCI WorldCom Inc. and William T. Esrey of Sprint Corp. quickly recognized that they shared an interest in rugged terrain. The two chief executives sparred genially over whose ranch was bigger--Ebbers's soybean operation in Canada, or Esrey's ranch near Vail, Colo.

"I lost that one," Esrey recalled. "Bernie's got more acreage."

Yesterday, Ebbers added another victory. He bested rival BellSouth Corp. in a bidding war for Sprint, a deal valued at about $129 billion that would be the largest merger in U.S. corporate history.

At a news conference in New York yesterday, the two executives stood at adjacent lecterns--Ebbers, tall and imposing, bearded and impatient, towering a full head above Esrey, whose reedy frame, trim blue suit and tight demeanor brought to mind the investment banker he was for nearly a decade.

Ebbers, 58, is accustomed to that kind of spotlight. A brash, Canadian-born former high school basketball coach who relishes his image as a maverick, he has built a global communications empire from the unlikely confines of his current home base in Mississippi, swallowing up more than 60 companies over the last nine years.

His entry into telecommunications came sideways: As Ebbers amassed a chain of hotels in the 1970s, one of his acquisitions included a small business that bought long-distance service wholesale from then-monopoly AT&T Corp. and resold it retail. In an early 1980s encounter that has become legend, Ebbers and a couple of business partners met at the Days Inn in Hattiesburg, Miss., to outline their idea for an expanded long-distance business, scribbling their thoughts on a napkin.

Sprint's roots go back further, to Brown Telephone, founded in 1899 in Abilene, Kan. It eventually amassed companies in Ohio, Oregon, Tennessee and Virginia, under various names, until it bought US Sprint in 1984.

Esrey has largely avoided the merger game, telling analysts, shareholders and would-be suitors he would just as soon plot his company's future alone. As he read his statement for the cameras--"It's an incredible day," he said at one point, his voice as flat as the tax code, "You can't help but get caught up in the excitement"--he appeared the very picture of a man caught in an unfamiliar role.

A native of Kansas City and a graduate of Harvard Business School, Esrey worked at AT&T and New York Telephone Co. before joining the investment banking firm, Dillon, Read & Co. In 1980, he joined Sprint, which was then called United Telecommunications Inc. The company was a long-distance reseller, but Esrey laid the groundwork for the Sprint of today, playing a key role in making plans for a new fiber-optic network.

Despite the public contrasts, Ebbers and Esrey have lately been charting parallel courses. With similar strategies and the same enormous rival--AT&T--the time seemed ripe for a partnership.

It was last spring, Ebbers recalled, that the whiff of a deal emerged. MCI WorldCom was eyeing Nextel Communications Inc. The purchase would give MCI the wireless presence it lacked. But Nextel carried much debt, and Ebbers walked away.

Not long thereafter came a call from Esrey, who offered to sell cellular service to MCI wholesale. "I thought that was a very interesting concept," Ebbers said.

A month later, as each company mulled its next move, Sprint's chief operating officer, Ronald LeMay, called MCI WorldCom Vice Chairman John Sidgmore. Both companies were snapping up licenses for new transmission spectrums to compete with high-speed Internet access offered by local phone companies. Perhaps, LeMay offered, they might jointly develop a way of exploiting the new spectrum?

For MCI WorldCom, the notion of a joint venture chafed against its obsession with control. But the argument for getting into wireless was growing more compelling: Bell Atlantic Corp. had launched a venture with Vodafone AirTouch, creating the largest national network, and AT&T agreed to jointly market cellular service with British Telecommunications PLC. The dialogue between Sidgmore and LeMay ripened into merger explorations.

In mid-July, Sidgmore and Ebbers flew to Kansas City, huddling with Ebbers and LeMay in the airplane hangar. After an hour of ranch talk, Ebbers and Esrey turned serious. An hour after that, a working agreement was in hand, though a host of details remained. Little was said about price.

"They said they would need a huge premium and we said we don't pay premiums," Sidgmore said. "Neither of us believed the other."

As Sidgmore and LeMay traded calls, a rough price agreement took shape. On Sept. 10, it was time to bring the executives together again. Esrey was vacationing at his ranch, riding horseback on Forest Service land, when LeMay alerted him, using an easily overheard radio system. In code, LeMay told Esrey it was time to place a call to Ebbers.

"I plopped down underneath a tree and I called, and Bernie and I talked," Esrey said. "I was on an Iridium phone," he added, referring to the satellite network whose lack of customers has landed the company in bankruptcy court. "So, it does work."

"Not that well," Ebbers quipped. "I thought he agreed to a much lower number."

The "Conversation on the Horse," as it is now known, cleared the last remaining hurdles. In mid-Septmeber, LeMay and Sidgmore met at the Willard Hotel in Washington. MCI brought along a banker from Salomon Smith Barney Inc.; Sprint brought theirs from SBC Warburg Dillon Read Inc. The numbers were penciled out.

Last week came full-blown "due diligence" as both companies sought certainty over the finances. As the lawyers took over, elliptical words gave way to precision, albeit in code: Sprint gained the moniker "Snow." WorldCom became "White," and also "Melon."

"We had to remain loyal to those code names even after the names were all over the media," chuckled one person in the room.

Neither of the new partners will discuss the complications of the weekend, when BellSouth roiled the quiet talks with a competitive bid, but the rival clearly injected surprise.

"Everybody has this image of BellSouth being this big deliberate company," said Davis Terry, the co-head of the telecommunications unit at Warburg Dillon Read. "We were impressed by their swiftness. They went much, much farther and had a lot more flexibility than anybody expected."

In the end, BellSouth's offer of stock and cash could not pry apart the fledgling partners, whose chief executives have clearly grown comfortable with one another. Those who know Ebbers well say he consciously employs his country boy image to disarming effect. (Along with his cowboy boots, he owns a 145-foot yacht named The Acquisition, and a Mercedes sedan.) Now, he appears eager to share his reputation with his new chairman.

"I'm not the only cowboy anymore," Ebbers said, flashing Esrey a grin. "We both have rented shoes on."

Staff writer Ianthe Jeanne Dugan contributed to this report. Goodman and Dugan reported from New York, Schwartz from Washington.

Details Of the Deal

The purchase of Sprint by MCI WorldCom is likely to be the costliest corporate buyout in U.S. history. Terms won't be final until stockholders and regulators approve the deal, but these are the details as they stand now:

What Sprint stockholders will get:

Between 0.94 and 1.2228 shares of MCI WorldCom stock for each Sprint share they own.

What will that be worth?

Assuming the average trading value of MCI stock before the deal closes is between $62.15 and $80.85 a share, the deal would value Sprint shares at $76 (a premium of 25 percent over Monday's closing price of $60.871/2). If MCI stock moves outside that range, Sprint shareholders could receive more or less than $76.

What about other classes of stock?

Sprint issues a separate class of stock, known as tracking stock, to represent the value of its wireless phone business. Under the deal, MCI WorldCom would issue a new tracking stock to represent the wireless business, swapping one new share for one old share. In addition, owners of the tracking stock would get a bonus of 0.1547 shares of MCI WorldCom common stock.

What is the deal worth?

At $76 per Sprint share, the equity value of the deal is about $115 billion. MCI WorldCom would assume about $14 billion in debt and preferred stock, for a total deal value of about $129 billion.