Verizon Secures $9.6 Billion Deal with Frontier Communications
Shareholders Give Green Light to Strategic Acquisition
In a significant development, Frontier Communications shareholders have approved a massive $9.6 billion sale to Verizon, paving the way for a major expansion in the telecom industry. The deal, announced in September, represents a strategic fit for Verizon, enabling the company to compete more effectively in additional markets.
A Premium Deal for Frontier
Under the terms of the agreement, Verizon will acquire Frontier Communications for $38.50 per share, a 44% premium to the company’s 90-day volume-weighted average share price. Additionally, Verizon will absorb approximately $10 billion of Frontier’s debt, providing significant financial relief to the company.
Overcoming Investor Concerns
Despite initial reservations from several large investors, who had sought a higher price for the deal, the majority of shareholders ultimately backed the acquisition. Proxy advisory firms Institutional Shareholder Services and Glass Lewis had urged investors to abstain from voting, hoping to stall the deal and explore alternative options. However, their efforts were unsuccessful, and the deal is now set to proceed.
A Competitive Boost for Verizon
The acquisition is expected to take 18 months to complete, after which Verizon will be better positioned to compete against rivals AT&T and T-Mobile. The deal will enable Verizon to offer more competitive unlimited plans and bundling options, enhancing its market presence.
A Year in the Making
The seeds of this deal were sown almost a year ago, when activist investment firm Jana Partners built a position in Frontier Communications and called for the company to sell itself. Verizon’s announcement of the deal marks a significant milestone in the company’s growth strategy.
Leave a Reply