The telecom company CenturyLink has agreed to buy Level 3 Communications in a cash and stock deal valued at $34 billion. This acquisition will give Century Link an additional 200,000 route miles of fiber, and raise the number of on-net buildings it services to about 75,000.
Commenting on the acquisition, Glen Post, CenturyLink CEO said, “The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fiber network and high-speed data services companies in the world.”
CenturyLink will fund the deal through a combination of cash on hand and about $7 billion in debt, financed by Morgan Stanley and Bank of America Merrill Lynch.
“This is a compelling transaction for our customers, shareholders and employees,” said Jeff Storey, President and Chief Executive Officer of Level 3 in the announcement.
“In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers.”
The deal is expected to close by the end of the third quarter of 2017.
Also Read: CITIC Telecom Acquires Acclivis
The combined company will make CenturyLink competent against the rivals like AT&T and Verizon Communications. Around 76% of the revenue of this new company comes from business customers.
After the close of the transaction, Glen Post will continue to serve as Chief Executive Officer and President and Sunit Patel, Executive Vice President and Chief Financial Officer of Level 3, will serve as Chief Financial Officer of the combined company.
The Chairman of CenturyLink’s Board at the time of the closing of the transaction will continue to serve as Chairman of the combined company. CenturyLink has agreed to appoint four Level 3 Board members at closing.
The combined company will be headquartered in Monroe, Louisiana.