Verizon to Acquire Frontier in $20 Billion Deal
Verizon, an American wireless carrier, has announced that it will acquire Frontier Communications, a fiber-optic internet provider.
The acquisition will allow Verizon to expand its market reach, primarily targeting the Northeast and mid-Atlantic regions, Texas, California, and several Midwest states. It will also add Frontier’s 2.2 million fiber subscribers to Verizon’s 7.5 million users.
The deal will add 7.2 million fiber locations to Verizon’s network, and Verizon has committed to continuing Frontier’s plan to build 2.8 million more fiber locations by the end of 2026.
The deal, valued at $20 billion, has Verizon offering $38.50 per share in cash, representing a premium of over 40% compared to the 90-day average share price. Verizon aims to close the deal within 18 months, pending approval from Frontier shareholders and regulatory bodies. Both Frontier’s and Verizon’s Boards of Directors unanimously approved the agreement.
Verizon Chairman and CEO Hans 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 says the acquisition will help it improve customer experience by offering premium services and more choice to its customer base.
Verizon claims the acquisition will expand its network and reach, but analysts believe it will remain a minor player. Currently operating in nine states, including Washington DC, with coverage lower than 10%, Verizon will extend its footprint to 25 more states. However, this will only increase its coverage by an average of 3%. In comparison, AT&T covers about 15% of the country.
