CenturyTel and Embarq agree merger

27 Oct 2008

The US local phone and internet operator CenturyTel has agreed a deal to acquire rival Embarq. The USD11.6 billion transaction includes the assumption of USD5.8 billion of Embarq’s debt. Under the proposed terms of the all-stock deal, CenturyTel is offering 1.37 of its own shares for each Embarq share, which Embarq says represents a premium of approximately 36% on its share price on 24 October. CenturyTel shareholders will own about 34% of the enlarged company. The two companies have a combined operating presence in 33 states with approximately eight million access lines and two million broadband customers. It is expected to have pro forma revenue in excess of USD8.8 billion and pro forma EBITDA of approximately USD4.2 billion, based on operating results for the year to the end of September 2008. Embarq, which was spun off from cellular operator Sprint in 2006, operates across 18 states, while CenturyTel has a footprint covering southern and mid-western states.

Glen F. Post III, CenturyTel’s Chairman and Chief Executive Officer, said: ‘We expect that bringing Embarq and CenturyTel together will accelerate both companies’ strategic plans, diversify our revenues and provide us with the expanded networks, expertise and financial resources to build long-term value for shareholders.’

Separately, Embarq has released its third-quarter financial results, with revenues dropping 4.3% year-on-year to USD1.53 billion but net income climbing 1.9% to USD160 million.

United States, EMBARQ, Lumen Technologies (formerly CenturyLink)