In a major effort to strengthen its broadband and mobility services, Verizon Communications has announced an agreement to acquire Frontier Communications for $20 billion. This acquisition aims to increase the density of Verizon's fiber optic network, expanding its broadband and wireless Internet services to a broader customer base across the United States.
The acquisition of Frontier, one of the largest fiber optic providers in the U.S., is expected to add 2.2 million fiber subscribers to Verizon's network. The deal will extend Verizon's reach to 25 million people, covering 31 states and Washington, D.C. Frontier's significant investment in fiber infrastructure over the past four years, totaling $4.1 billion, has positioned the company as a key player in the broadband market, with more than half of its revenues now coming from fiber products.
Verizon expects the agreement to be accretive to its revenue and adjusted EBITDA growth rates upon closing. Additionally, the company projects at least $500 million in annual cost savings. The acquisition aligns with Verizon's long-term strategy of growing and strengthening customer relationships and is expected to expand its share of the national broadband market.
USD 38.50 per share
Under the terms of the agreement, Verizon will acquire Frontier for $38.50 per share in cash. The transaction, which has been approved by the Boards of Directors of both companies, is expected to close in approximately 18 months, subject to regulatory approvals and other customary closing conditions. Despite the size of the acquisition, Verizon reaffirms its full-year 2024 guidance, including expectations for total wireless revenue growth and capital expenditures.
Verizon Communications Inc. specializes in wireless and wireline telecommunications services. The group's activity is organized around 2 areas:
- mobile telecommunication services: mobile telephone services, data transmission, etc. operated in the Unites States via Verizon Wireless;
- wireline telecommunication services: local and long-distance telephone services, broadband Internet access, TV channels broadcasting, e-mailing, etc.
Net sales break down by source of revenue between sales of telecommunication services (82.8%) and wireless telecommunication equipment (17.2%).
Net sales break down by customer between consumers (76.2%), businesses (21.9%) and other (1.9%).
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