Verizon to Acquire Frontier Communications in $20 Billion Deal to Expand Fiber Network
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On Fri, 6 Sept, 12:04 AM UTC
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Verizon Buying Frontier Communications In $20 Billion All-Cash Deal
The acquisition will allow Verizon to expand its fiber network across the nation Verizon said Thursday it is buying Frontier Communications in an all-cash deal worth $20 billion as the wireless carrier seeks to boost its fiber network. Verizon said the acquisition will enable it to expand on its "fiber footprint across the nation," augment its ability to deliver broadband services and expand the company's entrance into AI. Frontier's 2.2 million fiber subscribers in 25 states will join Verizon's 7.4 million Fios connections in nine states and Washington, D.C., Verizon said in a press release. Frontier has 7.2 million fiber locations and is committed to build an additional 2.8 stations by the end of 2026. "The acquisition of Frontier is a strategic fit. It will build on Verizon's two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network," Verizon Chairman and CEO Hans Vestberg said in a statement. The deal is expected to allow Verizon, which is based in New York City, to compete with AT&T and other carriers by allowing it to carry premium broadband services. The sale is expected to close in about 18 months and still needs the approval of Frontier shareholders, the Associated Press reported. Frontier's stock fell about 9% on Thursday. Verizon's climbed slightly, the AP reported.
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Verizon to buy Frontier in $20 billion deal to boost fibre network
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 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. Click here to connect with us on WhatsApp 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. More From This Section Russia wants to keep gas transit via Ukraine to Europe: Vladimir Putin US weekly jobless claims fall amid low layoffs on upright labour market President Emmanuel Macron aapoints Michel Barnier as new French PM Australia plans to introduce AI rules on human oversight, transparency US, Britain, EU to sign first legally binding international AI treaty 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. 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. Also Read AT&T beats Q1 estimates for wireless subscriber additions, free cash flow August PV sales down 4.5% due to rains, 'alarming' leftover inventory Appreciate Centre's 'clear stand and focus' towards electric cars: Mercedes Hasina must stay silent till Bangladesh seeks her extradition, says Yunus Rajasthan govt working to create 'investment-friendly' environment: CM
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Verizon Communications Inc. is set to purchase Frontier Communications in a $20 billion deal, aiming to significantly expand its fiber network coverage and compete more effectively in the high-speed internet market.
Verizon's Strategic Move in the Fiber Network Market
Verizon Communications Inc., one of the largest telecommunications companies in the United States, is making a bold move to strengthen its position in the high-speed internet market. The company has announced plans to acquire Frontier Communications in a deal valued at approximately $20 billion 1. This acquisition is set to significantly expand Verizon's fiber network coverage, allowing it to compete more effectively with other major players in the industry.
The Deal Structure and Financial Implications
The proposed acquisition involves a combination of cash and stock, with Verizon offering $6.3 billion in cash and assuming Frontier's debt, which stands at around $10 billion 2. This strategic move comes as Verizon seeks to enhance its fiber infrastructure and capitalize on the growing demand for high-speed internet services across the United States.
Expanding Fiber Network Coverage
One of the primary motivations behind this acquisition is Verizon's aim to rapidly expand its fiber network footprint. Frontier Communications currently operates a substantial fiber network that spans across 25 states 1. By integrating Frontier's infrastructure, Verizon is poised to significantly increase its fiber coverage, potentially reaching millions of additional households and businesses.
Market Impact and Competition
This deal is expected to have a considerable impact on the competitive landscape of the U.S. telecommunications industry. With the acquisition of Frontier's assets, Verizon will be better positioned to compete against other major players like AT&T and cable companies that have been aggressively expanding their own fiber networks 2. The move is likely to intensify competition in the high-speed internet market, potentially leading to improved services and more options for consumers.
Regulatory Hurdles and Approval Process
As with any major telecommunications merger, this deal will face scrutiny from regulatory bodies. The acquisition will need to clear antitrust reviews and obtain approval from the Federal Communications Commission (FCC) and other relevant authorities 1. Given the size and potential market impact of this deal, the regulatory review process could be extensive and may require certain concessions or commitments from Verizon to ensure fair competition in the market.
Future Outlook and Industry Trends
This acquisition reflects the ongoing trend of consolidation in the telecommunications industry, as companies seek to expand their networks and service offerings. It also underscores the growing importance of fiber-optic infrastructure in meeting the increasing demand for high-speed internet and advanced digital services. As 5G technology continues to roll out, the need for robust fiber networks to support these advanced wireless services becomes even more critical.
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