InvestingPort.com - VERIZON TO ACQUIRE RIVAL FRONTIER COMMUNICATIONS IN $20 BILLION DEAL

VERIZON TO ACQUIRE RIVAL FRONTIER COMMUNICATIONS IN $20 BILLION DEAL

By admin Sep, 05, 2024 Featured

Verizon Communications Inc. has agreed to purchase Frontier Communications Parent Inc. for an enterprise value of $20 billion, marking a significant move in the telecommunications industry. The acquisition, detailed in a joint statement, includes a cash offer of $38.50 per share, representing a 37% premium over Frontier’s last closing price of $28.04. In addition to its equity value, the deal includes Frontier's $11 billion in existing debt.

This acquisition is expected to boost Verizon’s ability to expand its high-speed internet services as demand for data continues to grow, particularly with the increasing usage of video streaming services and the adoption of artificial intelligence technologies. The deal aligns with Verizon's strategy to strengthen its fiber-optic network and enhance its competitiveness in the broadband market.

Frontier, based in Dallas, bills itself as the largest "pure-play" fiber internet company in the U.S., having generated $5.8 billion in revenue in 2023, with over half of its sales derived from fiber-optic products. 

The company has undergone financial restructuring, having declared bankruptcy in 2020 and emerged with $11 billion less debt in 2021. Earlier this year, Frontier initiated an internal business review after facing pressure from activist investor Jana Partners to improve its financial performance.

The acquisition also represents a full-circle moment for Verizon, which sold parts of its landline business in California, Florida, and Texas to Frontier in 2015 for $10.54 billion. Now, Verizon’s move to buy Frontier signals a strategic consolidation aimed at bolstering its position in the rapidly evolving telecommunications market.

Tags: verizon stock verizon acquistition

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