CenturyTel said Thursday that it would acquire Qwest Communications in a $10.6 billion stock-swap that would combine the two landline and Internet service providers and count as one of biggest telecommunications deals in years.þþCenturyTel will also assume the nearly $11.8 billion in net debt that Qwest had as of the end of last year, giving Qwest an enterprise value of $22.4 billion, the company said. þAs of last December, the two companies were operating in 37 states and serving about 5 million broadband customers, with 17 million access lines, as well as 1,415,000 video and 850,000 wireless clients. They expect to save $625 million within three to five years after the deal closes.þþGlen F. Post III, CenturyLink’s chief, said the scale attained through the deal would “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.”þþBoth companies, which have large landline operations, have sought to grow their businesses in the shadow of bigger competitors like AT&T and Verizon Communications, which offer both landline and cellphone services.þþIn the wake of acquisitions over the past decade by AT&T and Verizon, analysts have said that the telecom industry was ripe for further consolidation — recalling the wave of deals that swept the sector during the heady years of the 1990s.þþCenturyTel in 2008 purchased Embarq, a landline services spinoff of Sprint Nextel.þþCenturyTel’s market value was about $10.8 billion at Wednesday’s close, while Qwest’s market value was about $9.1 billion.þþCenturyTel said Barclays Capital, Evercore Partners, and J.P. Morgan Securities served as its financial advisors, and Wachtell, Lipton, Rosen & Katz and Jones Walker Waechter Poitevent Carrere & Denegre as legal advisors.þþAs for Qwest, Lazard, Deutsche Bank, and Morgan Stanley were the financial advisors, with Skadden, Arps, Slate, Meagher & Flom and Wilmer Cutler Pickering Hale & Dorr advising on legal.þþ– Michael J. de la Merced and Andrew Ross Sorkinþ
Source: NY Times
