 "Verizon to buy Frontier in $20 billion deal to boost fibre network")
Verizon said on Thursday it would buy Frontier Communications in an all-cash deal worth $20 billion, as the US wireless carrier looks to expand its fibre network.
Verizon has offered $38.50 per share, a premium of 37.3 per cent to Frontier’s closing price on September 3, a day before reports of a potential acquisition emerged. As of June 30, Frontier had a total debt of $11.25 billion.
Frontier shares, which had surged nearly 38 per cent in the previous session, fell below Verizon’s offer price in premarket trading to $35.14, while Verizon climbed about 1 per cent.
The acquisition, which is expected to close in about 18 months, will help Verizon better compete against AT&T and others by enabling it to deliver premium broadband services.
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Frontier has 2.2 million fibre subscribers in 25 states, which will combine with Verizon’s roughly 7.4 million FiOS connections in nine states and Washington D C.
Verizon had in 2016 sold its TV and internet business in California, Texas, and Florida to Frontier in a $10.54 billion deal.
This included a portion of its FiOS fibre networks and customers.
Verizon’s fibre network is now largely in the North East and mid-Atlantic regions, while Frontier’s coverage spans multiple states in the Mid West, Texas, California and others. “The acquisition of Frontier is a strategic
fit. It will build on Verizon’s two decades of leadership,” Verizon CEO Hans Vestberg said.