CenturyLink Acquiring Level 3 in $34B Deal

Consolidation in the telco market continues as CenturyLink and Level 3 merge.

By Sean Michael Kerner | Posted Oct 31, 2016
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Another mega acquisition is happening in the telco market, with CenturyLink acquiring Level 3 Communications in a deal valued at approximately $34 billion. Pending regulatory approvals, the deal is expected to be completed in the third quarter of 2017.

The deal is a cash and stock transaction, with Level 3 shareholders set to receive $26.50 per share in cash and a fixed exchange ratio of 1.4286 shares of CenturyLink stock for each Level 3 share. When the deal closes, existing CenturyLink shareholders are expected to hold approximately 51 percent and Level 3 shareholders 49 percent of the combined company.

The newly combined company will have its headquarters in Monroe, Louisiana and will oversee a massive fiber network. CenturyLink anticipates adding 200,000 route miles of fiber from Level 3 as part of the acquisition, in addition to 33,000 subsea fiber route miles.

"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," CenturyLink CEO and President Glen Post said in a statement. "This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses."

Post is expected to remain in the CEO role after the acquisition of Level 3 is completed.

CenturyLink has grown substantially in recent years thanks in no small part to acquisitions. In 2010, CenturyLink acquired Qwest in a $22.4 billion deal. Level 3 has also been active in the acquisition space, acquiring Global Crossing in 2011 for $1.9 billion.

Along with the acquisition news, CenturyLink announced its third quarter fiscal 2016 earnings, reporting quarterly revenue of $4.4 billion. Level 3 also announced its third quarter earnings today, with revenue coming in at $2.03 billion.

"This is a compelling transaction for our customers, shareholders and employees," Level 3 CEO and President Jeff Storey said 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."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist

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