CenturyLink buying Level 3 in USD34bn deal

1 Nov 2016

US-based network service providers CenturyLink and Level 3 Communications announced yesterday that their Boards of Directors have approved a definitive merger agreement under which CenturyLink will acquire Level 3 in a cash and stock transaction valued at approximately USD34 billion including the assumption of debt. Under the deal terms, CenturyLink shareholders will own approximately 51% and Level 3 shareholders will own roughly 49% of the combined company.

Colorado-based Level 3 Communications provides core transport, IP, voice, video, and content delivery for medium-to-large carriers, enterprises and government clients in North America, Latin America, Europe and selected cities in Asia over its Tier 1 network. CenturyLink’s press release states that the acquisition will increase the CenturyLink network by 200,000 route fibre miles including 64,000 route miles in 350 metropolitan areas and 33,000 subsea route miles connecting multiple continents. Accounting for those served by both companies, CenturyLink’s on-net buildings are expected to increase by nearly 75% to approximately 75,000, including 10,000 buildings in the EMEA and Latin America regions.

The release adds that the combined company’s pro forma revenue is equivalent to approximately USD19 billion for the twelve months ended 30 June 2016. Together, CenturyLink’s and Level 3’s revenue is 76% derived from business customers. The combined company will be based at CenturyLink’s existing headquarters in Monroe, Louisiana but will maintain a ‘significant presence’ in Colorado including the Denver metropolitan area.

The parties anticipate closing the transaction by the end of Q3 2017, subject to regulatory approvals from the US Federal Communications Commission (FCC), certain state regulatory approvals, an applicable waiting period under antitrust legislation, and other customary closing conditions. The deal is also subject to the approval of CenturyLink and Level 3 shareholders.

CenturyLink currently provides broadband, voice, video, data and managed services over a 250,000-route-mile US fibre network and a 300,000-route-mile international transport network. It offers global communications, hosting, cloud and IT services, and operates more than 55 data centres in North America, Europe and Asia.

Level 3 Communications provides local, national and global communications services to enterprise, government and carrier wholesale customers in more than 500 markets in over 60 countries across a global services platform anchored by its owned fibre networks on three continents and connected by extensive undersea facilities. Level 3’s portfolio of managed solutions includes fibre/infrastructure, IP-based voice and data communications, wide-area Ethernet services, video and content distribution, data centre and cloud-based solutions.

United States, Level 3 Communications, Lumen Technologies (incl. CenturyLink)