US fixed line operator Consolidated Communications has entered into a definitive agreement to acquire Charlotte, North Carolina-based rival FairPoint Communications in an all-stock merger transaction valued at approximately USD1.5 billion, including debt. The merger agreement has been unanimously approved by the boards of directors at both companies, and will see FairPoint shareholders each receive a fixed exchange ratio of 0.7300 shares of Consolidated Communications common stock for each share of FairPoint common stock. This equates to a premium of 17.3% to the 30-day average exchange ratio as of 2 December 2016. After closing, Consolidated’s shareholders will own approximately 71.3% of the pro forma combined company and FairPoint’s shareholders will own 28.7%.
Bob Udell, president and chief executive officer of Consolidated Communications, commented: ‘This transaction combines two companies with extensive fibre networks and complementary strategies focusing on being the leading business and broadband solutions provider. This merger positions Consolidated to leverage its extensive product and services portfolio and consultative sales approach across 24 states bringing advanced solutions and a better experience to customers.’