CenturyLink To Purchase Internet Backbone Provider Level 3 Communications For $34 Billion

CenturyLink has entered into a definitive agreement to buy Internet backbone provider Level 3 Communications in a cash and stock transaction valued at around $34 billion. The deal, which was unanimously approved by the board of directors for both companies, bolsters CenturyLink's fiber optic footprint by 200,000 miles, including 64,000 miles in 350 metropolitan areas and 33,000  subsea miles connecting multiple continents.

"The digital economy relies on broadband connectivity, and together with Level 3 we will have one of the most robust fiber network and high-speed data services companies in the world," said Glen Post, CenturyLink Chief Executive Officer and President. "This transaction furthers our commitment to providing our customers with the network to improve their lives and strengthen their businesses. It is this focus on providing fiber connectivity that will continue to distinguish CenturyLink from our competitors."

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Those competitors include companies such as AT&T and Verizon, among others, all of which are vying for home and consumers and especially businesses clamoring for faster Internet service.

CenturyLink is currently the third largest wireline provider in the United States providing phone and broadband to customers in 37 states. Meanwhile Level 3 Communications services clients and cloud services in more than 60 countries and 300 markets. Not only does this transaction make CenturyLink a much bigger player, the combined outfit will also be in better position to invest in further reaching and faster broadband infrastructure.

"This is a compelling transaction for our customers, shareholders and employees," said Jeff Storey, President and Chief Executive Officer of Level 3. "In addition to the substantial value delivered to shareholders, the combined company will be uniquely positioned to meet the evolving and global needs of enterprise customers."

Under terms of the deal, Level 3 shareholders will receive $26.50 per share in cash and 1.4286 share of CenturyLink stock for Level 3 share they own. That puts the purchase price at $66.50 per Level 3 share, a 42 percent premium based on the company's closing share price before the deal was announced.