Pacific Telesis Group Inc has moved to expand its US cellular telephony empire by agreeing to merge its Ohio and Michigan cellular interests with those of Cellular Communications Inc of New York as a first step to acquiring that company. Initially, the California and Nevada phone company will pay $87m for a 5% stake in Cellular, whereupon the cellular properties will be merged. Before completion, Cellular Communications will spin off as separate companies its international operations and long-distance business, and its Puerto Rico cellular operations issuing its holders pro rata shares in each. PacTel can then buy up to 27.5% of Cellular in the market by 1995, and will then pay $60 a share, $600m, for another 22.5%. It can buy the remainder of the company between 1995 and 1998 for at a price set by appraisers.