US communications provider CenturyLink has completed its acquisition of US telecommunications and Internet service provider Level 3 Communications for an estimated $30 billion. The combination of CenturyLink and Level 3 creates a global network services company capable of providing customers a wide range of technology solutions over a secure fibre-rich network.
The US Federal Communications Commission (FCC) approved the merger on November 30. CenturyLink's network now connects more than 350 metropolitan areas with more than 100,000 fibre-enabled, on-net buildings, including 10,000 buildings in EMEA and Latin America. The combined company will compete against US telecom heavyweights AT&T and Verizon.
The combined company, with estimated pro forma revenue of $24 billion for the twelve months ended June 30, 2017 (excluding revenue related to CenturyLink's May 1, 2017, colocation business sale and including estimated intercompany eliminations and purchase accounting adjustments), anticipates that approximately 75 percent of its core revenue will come from business customers and nearly two-thirds of its core revenue will come from strategic services.
"CenturyLink is now poised to offer an expanded, robust portfolio of communications solutions focused on our customers' networking and IT services needs," said Glen F. Post III, CenturyLink's chief executive officer. "Our customers, from individual consumers to global enterprises, will benefit from our expanded, innovative network solutions, our complementary managed services and our highly talented workforce."
The acquisition is more like a merger, with CenturyLink shareholders getting 51 percent ownership and Level 3 stockholders 49 percent. CenturyLink remains headquartered in Monroe, La., with a key operational presence in Colorado and the Denver metropolitan area.
Following the acquisition, CenturyLink is now better positioned to offer a broader, innovative product portfolio of network solutions and advanced IT services designed to meet complex technology and threat protection needs.
The acquisition allows CenturyLink to deliver these solutions and services to enterprises, government, wholesale and consumer customers over a large-scale, fiber-rich global network. CenturyLink will also continue to invest in the reach and speeds of its broadband infrastructure for small businesses and consumers.
"Our goal is to be the world's best networking provider and we have the ability to achieve this as one company," said former Level 3 CEO Jeff Storey, now CenturyLink's president and chief operating officer. "CenturyLink is focused on providing a differentiated experience for our customers, while driving profitable growth and increasing free cash flow per share. Our scale and experience will enable us to deliver on behalf of our customers, employees and our shareholders."