Verizon Communications (NYSE: VZ) this morning announced a $20 billion all-cash deal to acquire Frontier Communications (NASDAQ: FYBR), the largest pure-play fiber internet provider in the U.S. This acquisition will significantly expand Verizon’s fiber network, enhancing its mobility and broadband services nationwide.
Under the terms, Verizon will acquire Frontier at $38.50 per share, a 43.7 percent premium over Frontier’s 90-day volume-weighted average price as of September 3, 2024. The deal, pending shareholder approval, is expected to close in about 18 months. Verizon anticipates the acquisition will boost its revenue and Adjusted EBITDA growth while creating at least $500 million in annual cost synergies by year three through enhanced scale, distribution, and network integration.
Verizon said the combination will integrate Frontier’s cutting-edge fiber network into Verizon’s leading portfolio of fiber and wireless assets, including its best-in-class FiOS fiber offering. Over approximately four years, Frontier has invested $4.1 billion upgrading and expanding its fiber network, and now derives more than 50 percent of its revenue from fiber products.
Frontier’s 2.2 million fiber subscribers across 25 states will combine with Verizon’s approximately 7.4 million FiOS connections in 9 states and Washington, D.C. In addition to its 7.2 million fiber locations passed at the end of 2Q24, Frontier is committed to its Building Gigabit America plan to build out an additional 2.8 million fiber locations by the end of 2026, Inside Towers reported. The combined networks will enable Verizon to reach 25 million premises across 31 states and Washington, D.C.
Verizon also reaffirmed its full-year 2024 guidance of wireless service revenue growth of 2.0 percent to 3.5 percent, Adjusted EBITDA growth of 1.0 percent to 3.0 percent, Adjusted EPS3 of $4.50 to $4.70, and aggregate wireless and wireline capital expenditures between $17.0 billion and $17.5 billion.
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