(WEB HOST INDUSTRY REVIEW) — CenturyTel (www.centurylink.com) announced on Thursday it will acquire Qwest Communications (www.qwest.com) for $10.6 billion billion in stock as well as assume Qwest’s $11.8 billion debt, making the merger worth approximately $22.6 billion.
The deal will also effectively make CenturyTel the third largest local carrier in the United States, just behind AT&T and Verizon Communications.
In addition to phone service, Qwest also offers high-speed Internet, cable TV, wireless phone and VoIP.
CenturyTel has grown significantly in the past few years, particularly through acquiring the former local business of Sprint last year.
Weakened by the burst of the telecom bubble in the ’90s, as well as its decision to not build a wireless network at that time, Qwest has long been seeking a buyer for some or all of its business.
Once the merger is complete, the combined company would have 17 million phone connections, 1.4 million video customers and 850,000 wireless subscribers in 40 states, not to mention become one of the largest high-speed Internet carriers in the country.
CenturyTel says the acquisition will likely increase its free cash flow, minus integration costs, immediately after the deal is completed.
The new company would also save $625 million in annual costs by allocating operations.
In terms of management, CenturyTel CEO Glen Post III would maintain his leadership position, while Qwest CEO Edward Mueller will become a member of the board.
The company will maintain CenturyTel’s headquarters in Monroe, Louisiana, but will have a “key operational presence” in Denver.
CenturyTel will now be marketed as CenturyLink and the company eventually plans to change its official name.
No related posts.
