CenturyTel To Buy Qwest For $10.6 Billion - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Healthcare // Analytics

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.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
News
Can Cloud Revolutionize Business and Software Architecture?
Joao-Pierre S. Ruth, Senior Writer,  1/15/2021
Slideshows
10 IT Trends to Watch for in 2021
Cynthia Harvey, Freelance Journalist, InformationWeek,  12/22/2020
News
How CDOs Can Build Insight-Driven Organizations
Jessica Davis, Senior Editor, Enterprise Apps,  1/15/2021
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
2021 Top Enterprise IT Trends
We've identified the key trends that are poised to impact the IT landscape in 2021. Find out why they're important and how they will affect you.
Slideshows
Flash Poll