Healthcare // Analytics
News
4/22/2010
04:35 PM
50%
50%

CenturyTel To Buy Qwest For $10.6 Billion

Qwest, which has suffered from insider trading and accounting scandals, laid off some workers in its fiber optic unit this week, ahead of the stock transaction.

Debt-ridden Qwest Communications has been looking for a partner for several months and Thursday it said it has found one -- CenturyTel, which said it will acquire the former Baby Bell for $10.6 billion in a stock transaction.

The deal has an enterprise value of $22.4 billion, including $11.8 billion of Qwest debt. The firms expect to save $625 million in costs through the merger, the companies said.

If approved by regulators, the deal would leave just two of the former Regional Bell Operating Companies that were spun off from the old AT&T more than two decades ago. Verizon Communications and a reconstituted AT&T -- both assembled after combining other Baby Bells -- are the two surviving RBOCs.

Qwest has suffered from a series of problems including insider trading and accounting scandals, but in recent years the firm has been stabilized by CEO Edward Mueller.

"This combination will enhance our ability to deploy innovative IP products and high-bandwidth services to business customers, and offer superior, differentiated video products," said CenturyTel CEO Glen Post III in a statement. The acquisition calls for CenturyTel to be the dominant entity in the merged company with 50.5% ownership of the combined company and Qwest shareholders to have 49.5%.

"We look forward to becoming part of a larger company with a strong financial profile," said Mueller.

The new company, which is strong in traditional landline operations, will operate in 37 states.

Qwest laid off some workers in its fiber optic unit this week, possibly in preparation for the merger. In addition to its large debt, Qwest's business was hampered by a lack of a wireless unit of its own. Qwest sold a mobile service operated by Verizon Wireless.

Qwest recently reported that its debt totaled $14 billion. The firm said it had $575 million in cash.

Comment  | 
Print  | 
More Insights
Big Love for Big Data? The Remedy for Healthcare Quality Improvements
Big Love for Big Data? The Remedy for Healthcare Quality Improvements
Healthcare data is nothing new, but yet, why do healthcare improvements from quantifiable data seem almost rare today? Healthcare administrators have a wealth of data accessible to them but aren't sure how much of that data is usable or even correct.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Nov. 10, 2014
Just 30% of respondents to our new survey say their companies are very or extremely effective at identifying critical data and analyzing it to make decisions, down from 42% in 2013. What gives?
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of November 16, 2014.
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.