NEW YORK (AP) – Verizon Communications Inc. completed its $8.5 billion purchase of MCI Inc. on Friday, giving the big local phone company a national fiber-optic network and business-services unit with which to compete with the hefty rival created by the recent takeover of AT&T Corp. by SBC Communications Inc.

The acquisition of MCI, which required a three-month bidding war against Qwest Communications International Inc., marks the final chapter for a company that brought competition to the long-distance phone business, but was ultimately hobbled by the WorldCom scandal and bankruptcy.

The merger increases Verizon’s work force by about 40,000 employees to 250,000, a number which Verizon has said it would reduce by about 7,000 after the deal was completed.

Under terms of the deal, MCI stockholders get 0.5743 shares of Verizon, currently worth about $18, plus a cash payment of $2.738 for each MCI share. Verizon said it opted for the cash payment, totaling $779 million overall, rather than issuing more shares so the deal’s value would amount to at least $20.40 per share of MCI.

Verizon’s stock, down sharply since the MCI deal was cemented in early March, rose 7 cents a share to $31.29 in morning trading Friday on the New York Stock Exchange.

The MCI operations serving corporate and government customers is being folded into a new unit named Verizon Business.

As expected, MCI Chief Executive Michael Capellas announced that he was leaving the company now that the deal is completed. The completion of the deal comes less than two months after SBC closed on its $16 billion acquisition of AT&T, renaming the combined company AT&T Inc.