CenturyTel in 10.6-billion-dollar purchase of Qwest
AP News ( 2010-04-22 11:15:07 )
US telecom company CenturyTel announced Thursday it is acquiring Qwest Communications in an all-stock deal worth 10.6 billion dollars.
CenturyTel will take on 11.8 billion dollars of Qwest's debt as part of the transaction, the biggest merger in the telecommunications sector in the United States since a wave of consolidation in the 1990s.
The newly created company, which will operate under the name CenturyLink, will have a presence in nearly 40 US states.
The agreement values Qwest shares at 6.02 dollars each, a premium of 15 percent over the closing price on Wall Street on Wednesday.
The deal is expected to be finalized in the first half of 2011 pending regulatory approvals.
CenturyLink shareholders will hold 50.5 percent of the combined company when the deal is completed while Qwest shareholders will own 49.5 percent.
CenturyTel chief executive Glen Post said the merger will "enhance our ability to deploy innovative IP products and high-bandwidth services to business customers, expand broadband availability and speed to consumers, and offer superior, differentiated video products."
CenturyTel and Qwest currently serve local markets in 37 states with 17 million landlines, five million broadband customers and 850,000 wireless consumers.
Neither is a major player in a wireless communications sector dominated by giants AT&T and Verizon.
Qwest shares were 5.06 percent higher at 5.51 dollars in early afternoon trading in New York while CenturyTel was down 2.10 percent at 35.44 dollars.
Copyright 2010  AFP Global Edition
