Verizon Communications Inc. has announced an agreement to acquire Frontier Communications Parent, Inc. for $20 billion in an all-cash transaction, the companies said in a joint press release on Sept. 5.
The acquisition will significantly expand Verizon’s fiber network, extending its reach to 25 million homes and businesses across 31 states and Washington, D.C., and increasing its ability to deliver broadband and mobility services across the country, the company said.
Frontier is currently the largest fiber-only internet provider in the United States and has invested more than $4.1 billion in recent years to upgrade and expand its fiber network, according to the companies.
“Connectivity is essential in nearly every part of our lives and work, and no one delivers better than Verizon,” said Hans Vestberg, chairman and CEO of Verizon. “Verizon offers more choice, flexibility, and value, and 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.”
Nick Jeffery, president and CEO of Frontier, highlighted Frontier’s progress and the impact of the acquisition.
“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,” Jeffery said. “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.”
The transaction is expected to drive financial and strategic benefits for Verizon. It is projected to generate at least $500 million in annual run-rate cost synergies within three years due to increased scale and network integration, the company said.
“The acquisition of Frontier is a strategic fit,” Vestberg said. “It will build on Verizon’s two decades of leadership at the forefront of fiber and is an opportunity to become more competitive in more markets throughout the United States, enhancing our ability to deliver premium offerings to millions more customers across a combined fiber network.”
Verizon also reaffirmed its full-year 2024 guidance, which includes total wireless service revenue growth of 2.0–3.5 percent, adjusted earnings before interest, taxes, depreciation, and amortization growth of 1.0–3.0 percent, and adjusted earnings per share between $4.50 and $4.70.
Under the terms of the deal, Verizon will acquire Frontier for $38.50 per share in cash, representing a 43.7 percent premium to Frontier’s 90-day volume-weighted average share price as of Sept. 3.
The transaction has been unanimously approved by both companies’ boards of directors and is expected to close in approximately 18 months, pending regulatory approvals and approval by Frontier shareholders, according to the release.
