Wednesday May 13, 03:54 PM
Verizon, Frontier in 8.6 bln dlr land line deal
WASHINGTON (AFP) - US telecom giant Verizon (NYSE: VZ - news) announced on Wednesday it has agreed to sell its land line service in 14 US states to Frontier Communications in an all-stock deal valued at 8.6 billion dollars.
Verizon said in a statement that the sale of its traditional telephone business in the 14 states will allow the company to concentrate on providing wireless, broadband and high-speed Internet services.
The assets shed will be moved to a new company which immediately will merge with the Stamford, Connecticut-based Frontier.
Verizon shareholders will receive about 5.3 billion dollars in Frontier shares which will give them a 68-percent stake in the "new" Frontier.
"We expect that this transaction will benefit customers, employees and shareholders," said Verizon chairman and chief executive Ivan Seidenberg.
"This transaction is part of our multi-year effort to transform our growth profile and asset base to focus on wireless, FiOS fiber-optic services and other broadband development, and global IP (Internet Protocol networks)."
"This is a truly transformational transaction for Frontier," said chairman and chief executive Maggie Wilderotter. "With more than seven million access lines in 27 states, we will be the largest provider of voice, broadband and video services focused on rural to smaller city markets in the United States."
Frontier will acquire Verizon's land line operations in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin and some of its services in California.
Verizon said the deal involves 4.8 million local access lines for residential and small business customers.
At the end of the first quarter, Verizon had 35.2 million wireline access lines in 25 states and in Washington, the nation's capital.
Verizon and Frontier said they expect to complete the transaction in approximately 12 months.
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