Verizon to acquire Frontier Communications in $20 billion all-cash deal

Verizon Communications has reached a definitive agreement to acquire Frontier Communications in an all-cash deal valued at $20 billion (€18bn). The acquisition of Frontier, the largest pure-play fibre internet provider in the US, will expand Verizon’s fibre footprint nationwide, enhancing its ability to deliver premium mobility and broadband services to both existing and new customers. This deal will also enhance Verizon’s intelligent edge network, supporting digital innovations such as AI and IoT.

The integration of Frontier’s fibre network into Verizon’s portfolio, which includes its Fios offering, will further strengthen Verizon's assets. Frontier has invested $4.1 billion in upgrading and expanding its fibre network over the last four years, with more than half of its revenue now coming from fibre products. Frontier’s 2.2 million fibre subscribers across 25 states will join Verizon’s 7.4 million Fios connections in 9 states and Washington DC. In addition to Frontier’s 7.2 million fibre locations, the company plans to build an additional 2.8 million fibre locations by the end of 2026.

Hans Vestberg, Verizon's Chairman and CEO, emphasized the importance of connectivity: "Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon... we continuously look for ways to provide the best product and network experience to our customers." He added that the acquisition of Frontier is a "strategic fit" that will enhance Verizon’s ability to compete in more markets across the United States.

Nick Jeffery, President and CEO of Frontier, highlighted the significance of the acquisition for Frontier’s fibre network and shareholders: "Today’s announcement is recognition of our progress building a best-in-class fibre network... I am confident that this delivers a significant and certain cash premium to Frontier’s shareholders, while creating exciting new opportunities for our employees."

Verizon will acquire Frontier for $38.50 per share in cash, representing a 43.7 per cent premium over Frontier’s 90-day volume-weighted average share price as of September 3, 2024. The total transaction value is approximately $20 billion in enterprise value. The deal has been unanimously approved by both companies' Boards of Directors and is expected to close within 18 months, pending shareholder and regulatory approvals.

Verizon also reaffirmed its full-year 2024 guidance, which includes wireless service revenue growth of 2 to 3.5 per cent, adjusted EBITDA growth of 1 to 3 per cent, adjusted EPS of $4.50 to $4.70, capital expenditures between $17 billion and $17.5 billion, and an adjusted effective income tax rate of 22.5 to 24 per cent.

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