The U.S. Department of Justice has said it will approve CenturyLink, Inc.'s (NYSE: CTL) proposed purchase of Level 3 Communications, Inc. (NYSE: LVLT) – provided CenturyLink agrees to sell some metro network and dark fiber assets. subject to conditions outlined in a consent decree, including court approval of certain provisions. The consent decree leaves approval by the Federal Communications Commission and the California Public Utilities Commission as the last two regulatory hurdles to completion of the deal.
The agreement with the Department of Justice calls for CenturyLink to divest post-acquisition metro network assets Level 3 currently owns in Albuquerque, NM; Boise, ID; and Tucson, AZ. CenturyLink will retain its present assets in the three markets. Customers in those metros will have the option of continuing to receive service from the combined company or the company that acquires the Level 3 assets.
The combined company also must divest 24 strands of dark fiber that connect 30 specified city-pairs across the country. The divestiture will take the form of an indefeasible right of use (IRU), which CenturyLink points out is a customary transaction for such assets. The sale of the currently unlit fiber won't have an effect on any current customer, the service provider points out.
"We are pleased that the Department of Justice has conditionally cleared CenturyLink's acquisition of Level 3. It is an important milestone in our overall approval process," said CenturyLink Senior Vice President for Public Policy and Government Relations John F. Jones. "We anticipate court approval of our agreed resolution with the Department of Justice as early as this week. We are focused on meeting our targeted transaction closing timeframe of mid-to-late October."
CenturyLink first announced the deal, which would see it pay $34 billion for Level 3, nearly a year ago (see "CenturyLink will buy Level 3 for $34 billion"). The company has announced the expected management structure of the combined entity (see "CenturyLink unveils senior leadership team ahead of Level 3 closing").
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