Frontier Communications agreed to acquire Verizon's wireline operations that provide services to residential, commercial and wholesale customers in California, Florida and Texas, for $10.54 billion in cash. The deal requires regulatory approvals.
These Verizon properties include 3.7 million voice connections, 2.2 million broadband connections, and 1.2 million FiOS video connections. The network being acquired is the product of substantial capital investments by Verizon and is 54 percent FiOS enabled. Verizon spent more than $7 billion in the buildout of FiOS in the acquired territories.
"This transaction marks a natural evolution for our company and leverages our proven skills and established track record from previous integrations," said Maggie Wilderotter, Frontier Communications Chairman and Chief Executive Officer. "These properties are a great fit for Frontier and will strengthen our presence in competitive suburban markets and accelerate our recent market share gains. We look forward to realizing the benefits this transaction will bring to our shareholders, customers and employees."
Frontier said the deal benefits it in several ways: these Verizon wireline operations generated revenue of more than $5.7 billion in 2014. Frontier expects costs to be reduced by $525 million in the first year after close and $700 million by year three. Frontier expects the transaction to be 35 percent accretive to free
Frontier will finance this acquisition with the issuance of a combination of equity and equity-linked securities, as well as debt.
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- In October 2014, Frontier Communications completed its previously announced $2 billion acquisition of AT&T’s wireline business, statewide fiber network, and U-verse operations in Connecticut. As part of the acquisition, Frontier also acquired AT&T’s DISH satellite TV customers in Connecticut.
- In 2010, Verizon divested its local wireline operations serving residential and small-business customers in predominantly rural areas in 14 states by selling these operations to Frontier Communications. The deal included switched and special access lines, as well as its Internet service and long-distance voice accounts. The deal include all of Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. Also included were fiber-to-the-premises (FTTP) assets deployed by Verizon in 41 local franchises and the state of Indiana.
