Verizon is buying Frontier Communications in a $20 billion deal to strengthen its fiber network.
Verizon Communications Inc. said Thursday that the acquisition will also shore up its foray into artificial intelligence as well as connected smart devices.
Frontier has concentrated heavily on its fiber network capabilities over about four years, investing $4.1 billion upgrading and expanding its fiber network. It now gets more than half of its revenue from fiber products.
The price tag for Frontier, based in Dallas, is sizeable given its 2.2 million fiber subscribers across 25 states. Verizon has approximately 7.4 million Fios connections in nine states and Washington, D.C.
Frontier has 7.2 million fiber locations and has plans to build out an additional 2.8 million fiber locations by the end of 2026.
“The acquisition of Frontier is a strategic fit,” Verizon Chairman and CEO Hans Vestberg said in a prepared statement. “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, based in New York City, will pay $38.50 for each Frontier share. The deal is expected to close in about 18 months. It still needs approval from Frontier shareholders.
Shares of Frontier Communications Parents Inc., which were halted briefly on Wednesday after a report from the Wall Street Journal about the deal sent the stock up nearly 40%, fell 9% before the market opened on Thursday. Verizon’s stock rose slightly.
Verizon, one of the largest telecommunications companies in the United States, has announced its plans to acquire Frontier Communications in a $20 billion deal. The acquisition is aimed at enhancing Verizon’s fiber network expansion efforts and solidifying its position as a leader in the industry.
Frontier Communications, a telecommunications company based in Norwalk, Connecticut, has been struggling financially in recent years. The company filed for bankruptcy in 2020 and has been looking for a buyer to help stabilize its operations. Verizon’s acquisition of Frontier is seen as a strategic move to strengthen its presence in key markets and accelerate its fiber network expansion plans.
Verizon has been investing heavily in expanding its fiber network infrastructure to meet the growing demand for high-speed internet services. The acquisition of Frontier will allow Verizon to gain access to Frontier’s existing fiber network assets and customer base, enabling it to expand its reach and offer more competitive services to consumers and businesses.
The $20 billion deal is expected to bring significant benefits to both companies. For Verizon, the acquisition will help accelerate its growth in key markets and enhance its ability to deliver high-speed internet services to customers. For Frontier, the deal will provide much-needed financial stability and support its efforts to improve its operations and customer service.
Verizon’s CEO, Hans Vestberg, expressed excitement about the acquisition, stating that it will “significantly enhance our fiber network expansion efforts and bring even more value to our customers.” He also emphasized Verizon’s commitment to investing in cutting-edge technology and infrastructure to meet the evolving needs of consumers and businesses.
The acquisition of Frontier by Verizon is subject to regulatory approval and is expected to close in the second half of 2022. Once completed, the deal will further solidify Verizon’s position as a leading provider of high-speed internet services in the United States and pave the way for continued growth and innovation in the telecommunications industry.
