More M&A Mania: CenturyLink Buying Level 3

Oct. 31, 2016
CenturyLink (NYSE:CTL) and Level 3 Communications (NYSE:LVLT) announced that their boards of directors have unanimously approved a ...

CenturyLink (NYSE:CTL) and Level 3 Communications (NYSE:LVLT) announced that their boards of directors have unanimously approved a definitive merger agreement under which CenturyLink will acquire Level 3 in a cash and stock transaction valued at approximately $34 billion, including the assumption of debt. Upon the closing of the transaction, CenturyLink shareholders will own approximately 51% and Level 3 shareholders will own approximately 49% of the combined company.

The companies anticipate closing the transaction by the end of third quarter 2017, subject to regulatory approvals and the approval of CenturyLink and Level 3 shareholders. The combined company will be headquartered in Monroe, LA, and will maintain a significant presence in Colorado and the Denver metropolitan area. CenturyLink CEO and President Glen Post will head the combined company.

The transaction increases CenturyLink's network by 200,000 route miles of fiber, which includes 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents. Accounting for those served by both companies, CenturyLink's on-net buildings are expected to increase by nearly 75% to approximately 75,000, including 10,000 buildings in EMEA and Latin America.

"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," said Glen Post, CenturyLink CEO and president. "This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses. It is this focus on providing fiber connectivity that will continue to distinguish CenturyLink from our competitors. CenturyLink shareholders will benefit from the significant synergies and financial flexibility provided by the combined company's revenue growth and strong cash flow. For employees, this combination will bring together two highly customer-focused organizations and provide employees growth and advancement opportunities the companies could not offer separately."

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

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