Roughly two weeks after the controversial $39 billion AT&T/T-Mobile merger, CenturyLink Inc. is announcing their acquisition of Qwest. The tax free, stock-for-stock transaction was valued by the Dow Jones valued at $22 billion, and unifies the current 3 seed and 4 seed companies, making CenturyLink Inc. the nation’s third largest telecommunications provider with over 5 million broadband connections, 15 million access points, and customers in 37 states.
The deal did not come without a price, however. After months of waiting for regulatory approvals, many states required both companies to make investments in broadband infrastructure before giving the okay. The FCC stated both companies were heedful of fostering competition and shielding customers and recently approved the acquisition with enforceable conditions, one of them being the introduction of a low-income consumer broadband program that concentrates on connecting millions of customers in the combined company’s territory – to which the companies agreed. In addition, the merger terms state that Qwest stockholders will receive 0.1664 shares of CenturyLink stock for each share of Qwest stock they possess at closing.
According to CenturyLink’s President and CEO, Glen F. Post, III, the acquisition of the two companies will “bring greater broadband availability to customers and serves the public interest by allowing us to offer a wider variety of services than either company could offer alone.”
Collectively, Qwest and CenturyLink Inc. produced a combined revenue of $18.6 billion on a pro forma basis in 2010. Debt ratings agency Moody’s Investor’s Services, noted that the merger “brings a strong enterprise business service offering to CenturyLink,” and added that the revenues will grow to almost 40% of total revenues, in contrast to under 25% prior to the merger.
Monroe, Louisiana based CenturyLink is an S&P 500 company that is recognized by key technology industry analyst firms as a leader in the network services market. As a provider of wireless, voice and broadband services as well as voice, data and managed services via their multiple data centers and high-quality advanced fiber optic network, CenturyLink serves businesses of all sizes – from home offices in remote areas to Fortune 500 companies.
Before the merger, Denver, Colorado based Qwest was a leader in Internet-based image, data, and voice communications. With more than 30 million customers around the world, Qwest reportedly carried 600 emails and 240 million phone calls daily in its 14 state local phone service area alone. Qwest’s broadband network boasted over 1,800 access points of presence, including TeraPOPs, and spanned an notable 173,000+ global miles.
