Verizon Acquiring Rival Frontier Communications In $20 Billion Cash Deal

Verizon Communications is acquiring Frontier Communications, the largest pure-play fiber internet provider in the U.S., in an in all-cash transaction valued at $20 billion.

The deal shakes up the high-speed landscape by significantly expanding Verizon’s fiber footprint and accelerating its delivery of premium mobility and broadband services to current and new customers. It will also expand Verizon’s network for digital innovation in AI and IoT (Internet of Things).

The merger will integrate Frontier’s fiber network into Verizon’s fiber and wireless assets, including Fios. Frontier has invested $4.1 billion upgrading and expanding its fiber network, over the last four years, the companies said, and now derives more than 50% of its revenue from fiber products with 2.2 million subscribers across 25 states. They will join Verizon’s approximately 7.4 million Fios connections in 9 states and Washington, D.C.

Frontier plans to add an additional 2.8 million fiber locations by the end of 2026, adding to the 7.2 million it has currently.

The deal calls for Verizon will acquire Frontier for $38.50 per share in cash, representing a premium of 43.7% to Frontier’s 90-day volume-weighted average share price on September 3 (the last trading day prior to media reports regarding a potential acquisition of Frontier). The boards of both companies have approved the deal, valued at approximately $20 billion of enterprise value, and it’s expected to close in about 18 months, subject to approval by Frontier shareholders and regulatory approvals.

“Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon,” said the telco CEO Hans Vestberg. “We continuously look for ways to provide the best product and network experience to our customers as we bolster our position as the provider of choice.”

He called the acquisition of Frontier a strategic fit that will build on Verizon’s fiber chops and help it become more competitive in more U.S. markets.

“Less than four years ago, we set out an ambitious plan to Build Gigabit America, the digital infrastructure this country needs to thrive for generations to come,” said Frontier CEO Nick Jeffery. “Today’s announcement is recognition of our progress building a best-in-class fiber network and delivering reliable, high-speed broadband to millions of customers across the country. It’s also a vote of confidence for the future of fiber. I am confident that this delivers a significant and certain cash premium to Frontier’s shareholders, while creating exciting new opportunities for our employees and expanding access to reliable connectivity for more Americans.”