On Tuesday, Bloomfield, Colorado-based Level 3 Communications completed its purchase of Global Crossing in a $3 billion transaction that boosted its position as a worldwide telecommunications carrier. Level 3 provides services to a wide array of customers, including government agencies, large enterprises, and other telecom providers.
The merger united what were once two of the world’s largest fiber-based providers of telecom solutions, creating a single enterprise with network ownership in over 50 countries and connections to over 70 countries.
Level 3 disclosed its strategy to shift the listing of its common stock to the NYSE and employ a 1 for 15 reverse stock division of its common stock, which is expected to become effective subsequent to the close of trading on October 19th of this year. Until the transfer is complete, Level 3 Communication shares will carry on trading on the NASDAQ GSM.
According to the terms and conditions of the merger, Global Crossing shareholders will receive 16 shares of Level 3 common stock for every share of Global Crossing common or preferred stock that is possessed at closing. Under the deal the provider will distribute roughly 1.3 billion shares, and will redeem and discharge over $1.3 billion of Global Crossing’s remaining consolidated debt.
Level 3 Communications’ CEO, James Q. Crowe believes that the quickly developing telecom market denotes a remarkable opportunity for the provider, and that it is in the right position to capitalize on it. Crowe stated that Level 3 Communications is now a worldwide, high-tech and cutting-edge telecommunications corporation “that is substantially bigger and financially stronger, with an unrivaled IP/optical network and global reach, and an entrepreneurial culture singularly focused on the customer experience.”
The provider intends to conduct its international business with the Level 3 Communications title, but using a new brand identity. It will also operate via geographically organized enterprise units in Africa, Europe, Latin and North America and the Middle East, with each unit managed by a single leader that will be accountable for marketing, operations and sales for that region. Level 3 has announced it will remain based in Bloomfield, CO, and that North America will be the centralized location for corporate functions in addition to supporting the company worldwide.
Level 3’s executive VP and CFO, Sunit Patel, noted that immediately upon closing, the company will have “an improved balance sheet and credit profile,” and that will continue to improve as Level 3 reaches the projected “synergy benefits.”
