American communications firm CenturyLink has purchased network service provider Level 3 in a cash-and-stock deal believed to be worth between $24-34 billion.
The deal values Level 3 at $69.92 a share and is expected to be completed in the third quarter of 2017, at which point CenturyLink shareholders will own 51 per cent of the combined company.
Glen Post, CenturyLink Chief Executive Officer and President 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.
“This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses. It is this focus on providing fibre connectivity that will continue to distinguish CenturyLink from our competitors. CenturyLink shareholders will benefit from the significant synergies and financial flexibility provided by the combined company’s revenue growth and strong cash flow. For employees, this combination will bring together two highly customer-focused organisations and provide employees growth and advancement opportunities the companies could not offer separately.”
The acquisition will add 200,000 miles of fibre to CenturyLink's network, 64,000 of which is situated within 350 metropolitan areas. In terms of combined revenue, around 76 per cent will come from business customers, with strategic services making up the majority (65 per cent).
Furthermore, the respective portfolios complement each other in such a way that the new company will be able to provide a range of customers with an even broader range of services, as well as opening up opportunities to invest in broadband infrastructure.
Jeff Storey, President and Chief Executive Officer of Level 3 said: “This is a compelling transaction for our customers, shareholders and employees. 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.”
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