Just days after news of a potential acquisition surfaced, Monroe-based CenturyLink confirms this morning that it plans to pay roughly $25 billion in cash to acquire Colorado-based Level 3 Communications in a deal that would create one of the largest communications providers for businesses.
The entire cash-and-stock deal is valued at $34 billion and includes the assumption of debt. After the deal closes—which is expected to happen in the third quarter of 2017, pending regulatory and shareholder approval (the board of directors for each company has already approved the deal)—CenturyLink shareholders will own about 51% of the combined company and Level 3 shareholders will own about 49%. Level 3 shareholders will receive about $66.50 in cash and a portion of CenturyLink stock for each share of Level 3 they own.
CenturyLink provides internet, TV and phone services to consumers, as well as data and IT services for businesses. Level 3 provides data, video and other communication services to businesses and government agencies.
CenturyLink CEO and President Glen Post says in a statement the transaction is part of CenturyLink’s focus on providing fiber connectivity that will distinguish the company from its competitors.
“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,” Post says.
The transaction would increase CenturyLink’s fiber network by 200,000 route miles, of which includes 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents.
“This is a compelling transaction for our customers, shareholders and employees,” says Level 3 President and CEO Jeff Storey in a statement. “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 combined company will be based at CenturyLink’s headquarters in Monroe, and will keep a “significant presence” in the Denver area, where Level 3 is currently based.
Post will serve as CEO and president of the combined company. Sunit Patel, Level 3’s executive vice president and chief financial officer, will served as CFO of the combined company. CenturyLink is one of just two Fortune 500 companies based in Louisiana, along with Entergy Corp.
