|
Shares of Frontier Communications fell more than 9% in premarket
trading. Verizon climbed about 1%.
Verizon has offered $38.50 per Frontier share held, a premium of
37.3% to Frontier's closing price on Sept. 3, before reports of
a potential acquisition emerged.
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 to existing as
well as new customers.
Frontier has 2.2 million fiber subscribers across 25 states,
which will combine with Verizon's about 7.4 million Fios
connections in nine states and Washington, D.C.
Verizon's fiber network is 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 ... and is an opportunity
to become more competitive in more markets throughout the United
States," Verizon CEO Hans Vestberg said in a statement.
The deal is projected to generate at least $500 million in
annual run-rate cost synergies, and will add to Verizon's
revenue and adjusted earnings before interest, tax,
depreciation, and amortization growth upon closing.
(Reporting by Deborah Sophia in Bengaluru; Editing by Shilpi
Majumdar and Sriraj Kalluvila)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
