[‘Frontier] “This will build on Verizon’s two decades of leadership in fiber and provide an opportunity to become more competitive in more markets across the United States, enhancing our ability to deliver premium offerings to millions more customers across the combined fiber network,” says Hans Vestberg, Verizon CEO.
Verizon is acquiring Frontier Communications in an all-cash deal worth $20 billion, with the ultimate goal of taking on its biggest rivals in the US such as AT&T,
Verizon CEO Hans Vestberg He said the acquisition would disrupt the telecom industry because Frontier would enhance Verizon’s ability to deliver premium offerings to millions of new customers.
“The acquisition of Frontier is a strategic fit,” Vestberg said in a statement Thursday. “It builds on Verizon’s two decades of leadership in fiber and is an opportunity to become more competitive in more markets across the United States, enhancing our ability to deliver premium offerings to millions more customers across the combined fiber network.”
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Dallas-based Frontier has 2.2 million fiber customers in the US who will be included Verizon’s A whopping 7.4 million Fios connections.
Verizon’s fiber network is primarily located in the Northeast and Mid-Atlantic regions of the US, while Frontier’s Coverage This region is primarily in the Midwest, California, and Texas.
Cost synergies of $500 million
Basking Ridge, N.J.-based Verizon said it expects to achieve run-rate cost savings of at least $500 million by the third year after the deal closes, due to the benefits of increased scale and distribution and network integration.
This merger will help Verizon compete better with the largest companies. Telecommunications providers Being the largest broadband service provider in the world including AT&T, this company will be able to provide more premium broadband services.
“Connectivity is essential to nearly every part of our lives and work, and no one delivers it better than Verizon,” said Verizon CEO. “Verizon offers more choice, flexibility and value, and we’re constantly looking for ways to provide our customers with the best products and network experience as we strengthen our position as the provider of choice.”
Verizon-Frontier Acquisition Details
The deal is expected to be completed in approximately 18 months.
Verizon is offering $38.50 a share, which is 44 percent higher than Frontier’s closing price on Sept. 3.
Frontier’s total debt as of June 30 was more than $11 billion.
In 2016, Frontier paid $10.5 billion for Verizon These included television, landline phone, broadband Internet businesses, and the fiber-based Fios network in California, Texas, and Florida.
Frontier filed for bankruptcy under Chapter 11 To reduce its debt by more than $10 billion in 2020 and provide “significant financial flexibility” to support continued investment in its long-term growth plans.
Verizon’s merger plan for Frontier
The merger will integrate Frontier’s fiber network into Verizon’s portfolio of fiber and wireless assets, including its Fios offerings.
Verizon’s acquisition will significantly expand its fiber reach across the country, accelerating the company’s delivery of premium mobility and broadband services to existing and new customers.
Frontier President and CEO Nick Jefferies said the merger with Verizon shows how important its fiber network and customer base are.
“Today’s announcement recognizes the progress we’ve made building best-in-class fiber networks and delivering reliable, high-speed broadband to millions of customers across the country. It’s also a sign of confidence in the future of fiber,” Jeffrey said in a statement.