Verizon Communications said it agreed to acquire Frontier Communications in an all-cash deal valued at $20 billion.
Frontier is a pure-play fiber internet provider. It has spent $4.1 billion over the past four years to upgrade and expand its fiber network.
The acquisition expands Verizon’s fiber footprint by adding Frontier’s 2.2 million fiber subscribers in 25 states to Verizon’s 7.4 million Fios connections in nine states and Washington, D.C.
“Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon,” Verizon chairman and CEO Hans Vestberg said.
“Verizon offers more choice, flexibility and value, and we continuously look for ways to provide the best product and network experience to our customers as we bolster our position as the provider of choice.” Vestberg said. “The acquisition of Frontier is a strategic fit. It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.”
Verizon will pay $38.50 per share in cash for each Frontier share. Frontier shares rose 38% to close at $38.68 on Wednesday, when media reports about the deal started to circulate.
The Verizon and Frontier boards unanimously approved the transaction, which is expected to close in about 18 months.
“Less than four years ago, we set out an ambitious plan to Build Gigabit America, the digital infrastructure this country needs to thrive for generations to come,” Frontier president and CEO Nick Jeffery said. “Today’s announcement is recognition of our progress building a best-in-class fiber network and delivering reliable, high-speed broadband to millions of customers across the country. It’s also a vote of confidence for the future of fiber. I am confident that this delivers a significant and certain cash premium to Frontier’s shareholders, while creating exciting new opportunities for our employees and expanding access to reliable connectivity for more Americans.”
