Verizon Communications announced a deal to spin-off approximately 1.5 million access lines, approximately 180,000 DSL customers and approximately 600,000 long-distance customers in Maine, New Hampshire and Vermont.
Under the arrangement, Verizon will form a separate entity for these local exchange and related business assets. It will then spin off that new entity to Verizon's stockholders, and merge it with and into FairPoint, a telecommunications provider based in North Carolina with 31 local exchange companies in 18 states.
The total value to be received by Verizon and its stockholders in exchange for these operations will be approximately $2.715 billion. Verizon stockholders will receive approximately $1.015 billion of FairPoint common stock in the merger, based upon FairPoint's recent stock price and the terms of the merger agreement. Verizon will receive $1.7 billion in value through a combination of cash distributions to Verizon and debt securities issued to Verizon prior to the spin-off.
Approximately 3,000 Verizon company employees -- those who support primarily the local phone business that is spun off -- will continue employment with FairPoint after the merger. Approximately 300 Verizon company employees in Maine, New Hampshire and Vermont who provide national or regional support services will remain with the Verizon company that currently employs them.
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- In 2004, Verizon wireline-related businesses in Hawaii to The Carlyle Group for $1.65 billion in cash. The transaction includes the equity of Verizon Hawaii Inc., which operates 707,000 switched wireline access lines, as well as the services and assets of Verizon Long Distance, Verizon Online and Verizon Information Services (directory publishing) in Hawaii.
